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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
August 19, 1999
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Date of Report
INFERENCE CORPORATION
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(Exact name of Registrant as specified in its charter)
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<CAPTION>
<S> <C> <C>
Delaware 000-26334 953436352
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
incorporation or organization) Identification Number)
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100 Rowland Drive
Novato, California 94945
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(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 893-7200
Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
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On August 18, 1999, Inference Corporation, a Delaware corporation ("the
Company") announced its financial results for the quarter ended July 31, 1999. A
copy of the Company's press release announcing these financial results is
attached as Exhibit 99.1 hereto and incorporated by reference herein.
The press release filed as an exhibit to this report includes certain statements
about the Company's business which are "forward-looking" rather than "historic."
The press release also states that a more thorough discussion of factors
affecting the Company's operating results is included in the Company's public
reports filed with the Securities and Exchange Commission, including, without
limitation, the Company's Quarterly Reports on Form 10-Q, Annual Report on Form
10-K, Current Reports on Form 8-K and Registration Statement on Form S-3 dated
July 12, 1999.
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
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99.1 Press Release dated August 18, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INFERENCE CORPORATION
A Delaware Corporation
By: /s/ Mark A. Wolf
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Mark A. Wolf
Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
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99.1 Press Release dated August 18, 1999
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EXHIBIT 99.1
INFERENCE REPORTS
SECOND QUARTER FINANCIAL RESULTS
NOVATO, CALIF. - AUGUST 18, 1999 - Inference Corp. (NASDAQ: INFR) today
reported results for the second quarter ended July 31, 1999. The results were
consistent with the company's announcement on July 14 that it expected second
quarter revenues to be lower and the net loss greater than reported for the
first quarter.
Total revenues for the second quarter were $5.5 million, compared with
revenues of $7.5 million for the second quarter last year. The company incurred
a net loss of $2.7 million, or $0.36 per share, compared with a net loss of
$600,000, or $0.08 per share, which included a $253,000 or $ 0.03 per share
restructuring charge, for the same period a year ago. Product revenues for the
second quarter totaled $2.1 million, compared with $4.1 million the same quarter
a year ago.
For the quarter, revenues from the Americas operations were $3.0 million, a
29% decrease from $4.2 million during the same quarter last year. Product
revenues from Americas operations were $900,000, a 64% decrease from the prior
year. International revenues for the quarter were $2.5 million, a 24% decrease
from $3.3 million a year earlier. International product revenues were $1.2
million, down 27% from the second quarter of fiscal 1999.
- MORE -
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Inference Reports Second Quarter Financial Results - Page Two
"Our performance continued to reflect the revenue shortfall that marked the
results in the first quarter of fiscal 2000, including the dependence on large
transactions and the need to improve our sales execution. These issues are
clearly challenges for which there are no quick resolutions. We have taken
several steps to strengthen the business including the appointment of Al
Schallop as vice president of the Americas, the recruitment of new account
executives, and the addition of a number of tools and resources to better equip
and focus our sales force. In addition, we continue to invest in the development
and marketing of our recently announced k-Commerce Sales product line and the
next generation k-Commerce Support product targeted for release later this
year," said Charles W. Jepson, president and chief executive officer.
"We expect to see some benefit from our sales organization changes and new
programs in the third and fourth quarters. However, we do not expect our new
products to have a significant impact in this fiscal year. As a result, we do
not expect to be profitable for the second half of the year", said Jepson.
"During the quarter, 12 new companies joined our customer list and we
expanded business from more than 15 existing customers. We continue to receive
positive feedback from existing customers and prospects about our new k-Commerce
products. We believe these new products will improve our position in the
customer relationship management and e-commerce markets and allow us to reach
our true potential," concluded Jepson.
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ABOUT INFERENCE
Inference Corporation (NASDAQ: INFR) is a leading provider of software and
services for customer relationship management and e-commerce. Inference's k-
Commerce product family offers conversation-based, knowledge-driven solutions
for sales, service and support across the Web and the entire customer Contact
Center. k-Commerce leverages a company's knowledge, integrating e-commerce and
customer support for fast, accurate and consistent answers and personalized
service. Inference helps companies raise customer care to the next level while
taking e-commerce beyond the transaction.
Headquartered in the San Francisco Bay Area, with international headquarters
near London, England, Inference supports its customers from offices throughout
North America, Europe and Asia Pacific through a global professional services
organization. For further information, contact Inference at 415-893-7200, send
an e-mail to [email protected] or visit www.inference.com.
The Inference logo, k-Commerce and the k-Commerce logo are trademarks of
Inference Corporation in the United States and other countries. All other
company names and products are trademarks or registered trademarks of their
respective companies.
# # #
In addition to historical information contained herein, this news release
contains forward-looking statements that are subject to certain risks, trends
and uncertainties that could cause actual results to differ materially from
those expressed in or implied by such forward looking statements. Factors that
could cause or contribute to differences in the final results include, but are
not limited to, timeliness of new k-Commerce product releases, fluctuations in
quarterly operating results, the size and timing of customer orders for product
licenses, changes in the competitive marketplace, market acceptance and customer
demand for k-Commerce product offerings, risks of entering markets in which the
company has limited or no prior experience and the potential loss of key
employees. Second quarter financial results are not an indication of future
results. Further information on potential factors that may affect future results
are discussed from time to time in the Company's public reports filed with the
Securities and Exchange Commission, including, without limitation, the Company's
Quarterly Reports on Form 10-Q, Annual Report on Form 10-K, Current Reports on
Form 8-K and Registration Statement on Form S-3.
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INFERENCE CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
[Amounts in thousands, except net loss per share]
[unaudited]
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Three months ended Six months ended
July 31, July 31,
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1999 1998 1999 1998
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Revenues:
Products............................................... $ 2,132 $ 4,118 $ 5,208 $ 7,193
Services............................................... 3,374 3,394 6,691 6,668
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Total revenues........................................... 5,506 7,512 11,899 13,861
Operating costs and expenses:
Cost of revenues - products............................ 247 161 405 378
Cost of revenues - services............................ 1,698 1,723 3,381 3,562
Product development.................................... 1,942 1,437 3,389 2,502
Sales and marketing.................................... 3,540 3,738 7,463 7,471
General and administrative............................. 946 1,046 1,775 2,247
Amortization of intangibles............................ 61 0 61 0
Acquisition related.................................... 0 0 677 0
Restructuring.......................................... 0 253 0 1,574
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Total operating costs and expenses....................... 8,434 8,358 17,151 17,734
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Loss from operations..................................... (2,928) (846) (5,252) (3,873)
Interest income and other, net........................... 244 242 513 616
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Loss before income taxes................................. (2,684) (604) (4,739) (3,257)
Provision for income taxes............................... 0 0 0 0
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Net loss................................................. ($2,684) ($604) ($4,739) ($3,257)
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Net loss per share:
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Basic and diluted...................................... ($0.36) ($0.08) ($0.65) ($0.44)
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Shares used in computing net loss per share:
Basic and diluted...................................... 7,447 7,242 7,254 7,342
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INFERENCE CORPORATION
CONSOLIDATED BALANCE SHEETS
[Amounts in thousands]
[unaudited]
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July 31, January 31,
1999 1999
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ASSETS
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Current assets:
Cash and cash equivalents................................... $ 21,204 $ 25,761
Accounts receivable, net.................................... 5,927 7,063
Other current assets........................................ 727 433
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Total current assets....................... 27,858 33,257
Property and equipment, net..................................... 1,554 1,607
Intangible assets............................................... 1,006 0
Other assets.................................................... 483 511
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$ 30,901 $ 35,375
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
Accounts payable............................................ $ 715 $ 819
Accrued salaries and related items.......................... 2,222 2,371
Other accrued liabilities................................... 2,143 2,785
Deferred revenue............................................ 3,689 4,642
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Total current liabilities.................. 8,769 10,617
Shareholders' equity:
Common stock................................................ 76 70
Additional paid-in capital.................................. 48,478 46,328
Accumulated deficit......................................... (26,051) (21,312)
Accumulated other comprehensive loss........................ (371) (328)
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Total shareholders' equity................. 22,132 24,758
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$ 30,901 $ 35,375
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