SECURITIES AND EXCHANGE COMMISSION
Washington DC 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of January, 1999
GENTIA SOFTWARE PLC
Tuition House
St George's Road
Wimbledon
London SW19 4EU
United Kingdom
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
----- -----
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
----- -----
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b):
82- N.A.
Page 1 of 3 Pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused the Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GENTIA SOFTWARE plc
By: /s/ George F Sprenkle
George F Sprenkle
Chief Financial Officer
Date: February 4, 1999
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EXHIBIT A
Press Release Announcing Gentia's Fourth Quarter Results
GENTIA SOFTWARE
Tuition House, St. George's Road
Wimbledon
London SW19 4EU
(Nasdaq: GNTIY)
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
- --------------- ---------------------------------
George Sprenkle For Analyst Info: Julie Creed (312) 640-6724
Chief Financial Officer For General Info: Kelly Lofts (212) 661-8030
44 181 971 4000 For Media Info: Alicia Nieva-Woodgate (415) 986-1591
For Immediate Release
- ---------------------
GENTIA REPORTS FOURTH QUARTER RESULTS
-------------------------------------
Results Include One-Time Charges Of $6.6 Million
LONDON, January 28, 1999 -- Gentia Software (Nasdaq: GNTIY), a leading provider
of analytical applications for enterprise-wide deployment, today reported
results for the fourth quarter ended December 31, 1998. Revenues for the fourth
quarter of 1998 totalled $7.9 million, compared with $5.5 million for the fourth
quarter ended December 31, 1997. Fourth quarter revenues were comprised of $4.1
million in license revenues and $3.8 million in service revenues, compared with
$2.2 million and $3.3 million for the year-ago quarter, respectively. For the
twelve months ended December 31, 1998 revenues totalled $29.5 million compared
with 1997 revenues of $27.2 million.
The Company reported a net loss of $9.5 million for the most recent
quarter, or $0.93 cents per share, compared with a net loss of $3.1 million, or
$0.33 per share, in the fourth quarter of 1997. Results for the fourth quarter
include one-time charges of $6.6 million, or $0.65 per share, comprised of a
$2.9 million restructuring charge, a $2.7 million provision for doubtful
accounts and an estimated $1.0 million charge for in-process research and
development relating to the Company's acquisition of Compression Sciences in
November 1998. Restructuring costs are principally related to employee severance
costs and costs associated with the exit from certain businesses. The company
said it expects to record an additional $0.5 million of severance costs in the
first quarter associated with the current restructuring plan. For the 12-months
ended December 31, 1998 the Company reported a net loss of $15.6 million, or
$1.57 per share, compared with a net loss of $4.0 million, or $0.44 per share,
for the year-ago period.
Paul Rolph, Chairman and Chief Executive Officer of Gentia, said "We
entered 1998 in the process of transitioning the Company from a technology-led
to a solution-led provider--a strategy we believe provides the greatest
opportunity to accelerate sales growth over the long term. Our most significant
step in this process was marked by our partnership with Renaissance Worldwide
and the subsequent launch of the Renaissance Balanced Scorecard powered by
Gentia in March 1998. We quickly experienced a surge in market interest
surrounding the
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Gentia Software Page 2
product and despite downward pressure on the overall industry--including Y2K
issues and the financial crisis in Asia--market interest began to translate into
sales."
"Overall market awareness of the analytical applications sector is
increasing everyday and our sales continue to trend in a positive direction. Our
share of that market increased significantly during 1998. To accelerate our
growth and gain a larger market share, we have intensified our focus on certain
markets and realigned our sales force. We believe the new streamlined approach
will prove to be more effective in closing deals, as well as more cost efficient
than our previous structure because we have eliminated a layer of management and
increased customer-facing activities. We have the highest confidence in the
quality, uniqueness and efficacy of our platform and solution offerings,
combined with the new leadership of our sales effort and are committed to
breaking even in the second quarter of 1999," concluded Mr. Rolph.
1999 Strategic Focus
o Goals include aggressively pursuing the market for the Balanced Scorecard
with the best-in-class solution; widening potential partnering opportunities
by supporting balanced scorecard definitions on all major RDBMS formats i.e.
Oracle, SQL Server, Informix, etc; and identifying new strategic Balanced
Scorecard sales partnerships in addition to Renaissance Worldwide and
GartnerGroup, and add to our growing list of over 40 scorecard customers
worldwide. In addition, we will continue to drive market awareness and
acceptance through leadership with the Balanced Scorecard Technology Council
(3,800 members).
o We plan to continue to invest in our suite of Enterprise Performance
Management (EPM) solutions as market demand continues to accelerate, and we
believe will continue to do so well past the Millennium. While the Balanced
Scorecard will continue to be a major focus, we plan to continue our unique
business model of applying our enterprise software with third-party domain
expertise to deliver best-in-class analytical solutions. We will market these
solutions with "business knowledge built in," further endorsing the
commercial and time to market advantages of starting from template
applications which can be easily customized. Partnerships will continue to
play a major role in accelerating our solution strategy and we are confident
that up to three new partnerships will be signed in the very near future. Key
new solution deliverables in 1Q99 include:
o An Activity Based Management application for profitability analysis.
This is a joint development with one of the Big Five consulting firms.
This solution has been successfully beta tested with Credit Suisse
First Boston.
o A Network Traffic Analysis application targeting major
telecommunications firms. This high impact ROI application will be
launched via a strategic partnership with a leading telecommunications
firm and a major systems vendor.
o A Performance Measurement System for measuring and analyzing key
performance indicators (KPIs) across an organization. This solution is
based on Gentia's 15 years of experience in building Executive
Information Systems (EIS).
o Continued investment is also scheduled to establish our Gentia Platform as
the preferred choice for developing Analytic Applications. Gentia, the
Application Framework, Excel Add-In and Web Suite will be packaged as an
integrated Applications Development Environment branded as the Gentia
Millennium Applications Platform (G-MAP). G-MAP
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Gentia Software Page 3
will provide a totally consistent look and feel across applications deployed
through client/ server and web environments. This is a major advantage for
Gentia, which will dramatically reduce learning curves for both customer end
users and IT staff when deploying enterprise applications.
o Our engineering focus will continue to be on exploiting the OLE DB for OLAP
multi vendor interface, so that Gentia Analytic Applications can be
seamlessly based on a whole variety of industry leading databases such as SAP
Business Warehouse, SQL Server OLAP Services, Applix TM1, SAS, NCR, etc. Time
to market will be reduced by a partnership with Simba Technologies to embed
their SimbaProvider OLE DB for OLAP product within Gentia.
o Cost of ownership continues to be a hot topic, so Gentia is investing in two
ultra thin client environments, 100% Windows and 100% Java for delivery in
the fourth quarter.
o We will continue to leverage the acquisition of Compression Sciences and its
Java-based knowledge discovery solution by aggressively pursuing three unique
opportunities:
1 Development of a new range of `Intelligent Applications' including
integrated knowledge discovery capabilities. These applications will
be delivered by combining the K.wiz components with the Gentia
Millennium Applications Platform and other component architectures.
This combination will provide unlimited business intelligence
reporting with comprehensive detailed analyses.
2 Java-based knowledge discovery and data mining solutions specifically
in the area of e-commerce. K.wiz can quickly facilitate real time
automatic detection of patterns and trends in large databases. This is
an essential requirement of applications such as basket analysis and
fraud detection applications. Java is the language of the web and this
solution is very complementary and compatible with the needs of many
e-commerce businesses. Analysis of web-based transactions is still at
a very rudimentary stage on most web sites.
3 Component architecture enables K.wiz to be easily embedded in other
systems and vendor applications. Our channels group is currently
pursuing this opportunity with web and e-commerce application
developers.
Fourth Quarter Highlights
o Steve Fluin joined Gentia as Vice President of Worldwide Sales following a
highly successful career at Retek Information Systems and Comshare.
o Released Gentia version 5.0, the first industry platform for analytical
applications that is fully integrated with Microsoft SQL Server. Other
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Gentia Software Page 4
version 5.0 highlights include improved performance enhancements for
widescale deployment, support for the Euro, and easy to use application
design components and data loading tools.
o Major deals were closed during the quarter with Zurcher Kantonal Bank, Dow
Agroscience, Pacific Health Systems, US Government, OCBC -- Singapore,
Swedish Post, Telenor, ABB Automation, Emirates Petroleum Products, L.A.
Cellular. Major upgrades at V.S.B. Vredenstein, ANWB, Avery Dennison, MDIS
and Bull Information Systems.
o Announced Open Architecture for Enterprise Performance Management solutions
and strategic relationship with Intersolv for enhanced RDBMS integration.
o The acquisition of Compression Sciences was completed in early November.
About the Company
Gentia Software (Nasdaq: GNTIY) is the leading supplier of analytical
applications that enable clients to maximize their competitive position through
enterprise-wide deployment of strategy management, performance measurement and
operational analysis solutions. By leveraging the only networked Business
Intelligence Solution designed for enterprise-wide deployment, Gentia enables a
new class of analytical applications, such as the Balanced Scorecard, which
ensures information delivery to key decision makers' desktops and browsers
throughout an enterprise. Gentia Software's worldwide client list of more than
510 customers includes JP Morgan and Company, Volvo, McDonald's Restaurants,
Fortis, Swiss Reinsurance and Sun Microsystems. The Company has headquarters in
Boston and London and operates in more than 20 countries worldwide.
For additional information about Gentia, visit the Company's Web site at
www.gentia.com or call 1-888-4GENTIA or 1-781-224-0750. To receive additional
information via fax at no charge, dial 1-800-PRO-INFO and enter code GNTIY.
This news release contains statements of a forward-looking nature relating
to the financial performance of Gentia Software. Such statements are based upon
the information available to management at this time, and they necessarily
involve risk because actual results could differ materially from current
expectations. Among the many factors that could cause actual results to differ
from those set forth in the Company's forward-looking statements are changes in
general economic conditions, actions taken by customers or competitors, and the
receipt of more or fewer orders than expected.
(Tables to Follow)
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Gentia Software Page 6
GENTIA SOFTWARE PLC
Condensed Consolidated Statement of Operations
<TABLE>
<CAPTION>
Three months ended Twelve months ended
------------------------------ --------------------------------
Dec. 31, Dec. 31, Dec. 31, Dec. 31,
1998 1997 1998 1997
----------------------------------------------------------------
(in thousands, except per share amounts)
(unaudited) (unaudited) (unaudited) (audited)
US$ US$ US$ US$
<S> <C> <C> <C> <C>
Revenues:
License ........................................... $ 4,097 $ 2,215 $ 16,173 $ 14,985
Services and other ................................ 3,772 3,308 13,359 12,186
-------- -------- -------- --------
7,869 5,523 29,532 27,171
Cost of revenues:
License ........................................... 810 145 1,809 1,179
Services and other ................................ 2,433 1,894 8,400 6,800
-------- -------- -------- --------
3,243 2,039 10,209 7,979
Gross profit ........................................... 4,626 3,484 19,323 19,192
Operating expenses:
Sales and marketing ............................... 7,079 5,192 19,720 15,881
Research and development .......................... 1,646 1,292 6,831 4,699
General and administrative ........................ 1,158 1,235 4,367 4,706
Purchased research and development ................ 1,037 -- 1,037 --
Restructuring costs ............................... 2,869 -- 2,869 --
Goodwill amortization ............................. 213 102 596 371
-------- -------- -------- --------
Total operating expenses ...................... 14,002 7,821 35,420 25,657
Loss from operations ................................... (9,376) (4,337) (16,097) (6,465)
Other income ........................................... 76 350 681 1,235
-------- -------- -------- --------
Loss before provision for income taxes ................. (9,300) (3,987) (15,416) (5,230)
Provision for income taxes ............................. (185) 874 (185) 1,247
-------- -------- -------- --------
Net loss ............................................... ($ 9,485) ($ 3,113) ($15,601) ($ 3,983)
======== ======== ======== ========
Basic loss per share ................................... ($ 0.93) ($ 0.33) ($ 1.57) ($ 0.44)
Diluted loss per share ................................. ($ 0.93) ($ 0.33) ($ 1.57) ($ 0.44)
Shares used to compute basic EPS .................. 10,178 9,398 9,950 9,155
Shares used to compute diluted EPS ................ 10,178 9,398 9,950 9,155
</TABLE>
<PAGE>
GENTIA SOFTWARE PLC
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, December 31,
1998 1997
-------------- ------------
(unaudited) (audited)
(in thousands)
US$ US$
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents ......................................... $ 5,314 $ 20,332
Accounts receivable, net of allowances $ 3,801
(Dec. 31, 1997 - $1,819) .......................... 10,565 7,758
Prepaid expenses and other current assets ......................... 1,363 1,921
Tax recoverable ................................................... 212 285
-------- --------
Total current assets ......................................................... $ 17,454 $ 30,296
Property and equipment, net .............................................. 2,192 2,037
Goodwill on acquisition, net of amortization of $1,789
(Dec. 31, 1997 - $494) ............................................... 6,902 3,602
Deferred taxes ........................................................... -- 459
======== ========
Total assets ................................................................. $ 26,548 $ 36,394
======== ========
Liabilities and shareholders' equity
Current liabilities:
Current portion of lease obligations .............................. $ 78 $ 105
Accounts payable .................................................. 2,203 1,743
Accrued liabilities ............................................... 3,778 1,337
Deferred revenues ................................................. 4,754 3,630
Other accounts payable ............................................ 1,766 1,337
-------- --------
Total current liabilities .................................................... $ 12,579 $ 8,152
Non current liabilities:
Deferred taxation ................................................. -- 274
Long-term portion of lease obligations ............................ 59 109
-------- --------
Total Liabilities ............................................................ $ 12,638 $ 8,535
Shareholders' equity:
Ordinary shares ................................................... 2,445 2,300
Additional paid-in capital ........................................ 28,881 27,406
Retained (deficit) ................................................ (16,837) (1,236)
Cumulative translation adjustment ................................. (579) (611)
-------- --------
Total shareholders' equity ................................................... $ 13,910 $ 27,859
-------- --------
Total liabilities and shareholders' equity ................................... $ 26,548 $ 36,394
======== ========
</TABLE>
