BroadVision's CEO Discusses Q2 2012 Results - Earnings Call Transcript

BroadVision, Inc. (BVSN)

Q2 2012 Earnings Call

July 25, 2012 05:00 pm ET

Executives

Peter Chu - VP, Product Management and Strategy

Shin-Yuan Tzou - CFO

Analysts

Presentation

Operator

Good evening ladies and gentlemen and welcome to today's BroadVision Q2 year 2012 earnings announcement and investor teleconference. Please note that all your lines are on listen-only mode and there will be time for a Q&A session, towards the conclusion of this meeting. (Operator Instructions).

And now to start off our conference, I would like to welcome and turn the call over to Mr. Peter Chu, Vice President of Product Management and Strategy. Go ahead sir.

Peter Chu

Yes, hi good afternoon everyone. My name is Peter Chu , Vice President of Product Management and Strategy at BroadVision. Welcome to our 2012 Q2 financial results announcement and conference call. I will first provide our standard cautionary comments on forward-looking statements and other legal matters. Next, Dr. Shin-Yuan Tzou, our CFO, will review the second quarter results which were announced in a press release earlier this afternoon. Next on behalf of Dr. Pehong Chen, our CEO, I will provide product and marketing updates and then wrap up with a summary.

As always we will be pleased to take your questions following the formal portion of the call. During the course of this conference call BroadVision may make forward-looking statements. All forward-looking statements included in this call are based upon information available to BroadVision as of the date of this call, including statements regarding our expectations of future financial results and product releases and BroadVision assumes no obligation to update or correct any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from BroadVision’s current expectations. Actual future results may be impacted by various important factors including without limitation, changes in the market, competitive environment and macroeconomic conditions. Additional information on potential factors that could affect the company’s financial results is included in the company’s periodic reports on forms 10-K and 10-Q and other documents filed with the SEC.

All statements and information can also be found on our website at www.broadvision.com under the Company/Investor Information/Press Releases page. You can also view our SEC filings and historical financial results under the Company/Investor Information/SEC filings page.

Now I will turn the call over to Shin-Yuan.

Shin-Yuan Tzou

Thanks, Peter. First, our Q2 2012 results in terms of P&L, balance sheet and other operating highlights. Revenues. Q2 total revenues were 3.6 million with 1.2 million in licenses, 1.7 million in maintenance and 0.7 million in consulting services. Sequentially this compares to Q1 2012 results, total revenue of 3.8 million with 1.4 million in licenses, 1.7 million in maintenance and 0.7 million in consulting services. In comparison, Q2 2011 total revenues were 4.0 million with 1.1 million in licenses, 2.2 million in maintenance and 0.7 million in consulting services. Revenues declined as our older products mature, while the new Clearvale business is the only time to [rent]. Q2 2012 revenues by region were 41% Americas, 38% EMEA and 21% APJ compared to 43% Americas, 36% EMEA and 31% APJ in Q1 2012 and 43% Americas, 34% EMEA and 23% APJ in Q2 2011.

As we have discussed in the past, we expect our geographical mix to fluctuate somewhat from quarter to quarter mainly due to our small footprint.

Expenses, on GAAP basis, total operating costs plus costs of revenues were 5.4 million in Q2 2012 compared to 5.5 million in Q1 2012 and 6.0 million in Q2 2011. In Q2 2012, we generated a GAAP net loss of 2.5 million or $0.54 per basic and diluted share compared to a net loss of 1.3 million or $0.29 per basic and diluted share in Q1 2012 and a net loss of 1.5 million or $0.34 per basic and diluted share in Q2 ’11. Q2 ‘12 results included a foreign exchange loss of $804,000, the company does not engage in active foreign currency trading. The foreign exchange loss was due to book adjustments of certain balance sheet items primarily our deposit in Europe to reflect the dollar exchange rate for its fluctuation during the quarter.

In June 2012, we completed our headquarter move. Our new address is Suite 210, 1700 Seaport Boulevard, Redwood City which is in the same campus as our previous headquarter. The move did not maturely [impaled] due to expenses after the move the company no longer has excessive real [asset].

Looking at our four main cost centers, first costs of goods sold, concentrated mainly on cost of services and the cost of cloud hosting was $1.2 million in Q2 ‘12 compared to $1.3 million in Q1 ’12.

Second, R&D expenses for Q2 ‘12 were $1.6 million similar in Q1 ‘12. Sales and marketing expense for Q2 ‘12 was $1.5 million same as in Q1 ‘12.

Finally, G&A expenses for Q2 ‘12 was $1.1 million same as in Q1 ‘12. Balance sheet, as of June 30, 2012; we had $52 million of cash and cash equivalents and short-term investments with no long-term debt compared to the $55.3 million at the end of Q1 ‘12.

We have no exposure to any auction raised securities or ARS. Account receivables were $2.8 million at the end of Q2 ‘12 compared to 3.2 in Q1 sales. Base shares outstanding in Q2 2012 was 71 base compared to the 75 base in Q1 '12.

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