Vitria Announces Second Quarter Results

Business Wire, July 26, 2001

Business Editors/High-Tech Writers

SUNNYVALE, Calif.--(BUSINESS WIRE)--July 26, 2001

Vitria Technology, Inc. (Nasdaq:VITR), a leading integration server provider, today announced results for the second quarter ended June 30, 2001.

Revenues for the second quarter were $34.4 million, an 8% increase over the $31.8 million reported for the second quarter in 2000. Excluding non-cash charges relating to stock compensation and the acquisition of XMLSolutions(1), Vitria's pro forma net loss for the quarter was $12.3 million, or $0.10 per share, compared to pro forma net income of $1.0 million, or $0.01 per share, for the second quarter in 2000. Including charges relating to the acquisition of XMLSolutions and amortization of charges relating to stock compensation, Vitria's net loss for the quarter was $15.4 million, or $0.12 per share, compared to net income of $28 thousand, or $0.00 per share for the second quarter in 2000.

"Despite challenging market conditions in North America and Europe, we were pleased to continue expanding our business into new vertical markets," said JoMei Chang, president and CEO of Vitria. "We believe the quality and breadth of our Q2 customer list demonstrates the excellent progress we have made in diversifying our business into new verticals, such as financial services and manufacturing, while remaining the leading choice for large companies in the telecommunications space. Our number one priority as we work through these tough market conditions is execution. In the short term, we will focus on our goal of a return to profitability in the first half of 2002. In the longer term, we are focused on using our strong balance sheet to fund the sales and marketing execution required to translate product leadership into market share leadership in the multi-billion dollar integration software market."

Customers

Vitria added over 35 new customers in the second quarter. The company continued to penetrate new vertical markets with key wins at Fortune 1000 and Global 500 companies in the entertainment, financial services, government, healthcare, manufacturing, pharmaceutical, telecommunications and transportation industries. New customers in Q2 included Aventis, Brasil Telecom, Cardinal Health, DeTeMobil Deutsche Telekom MobilNet GmbH, The Goodyear Tire & Rubber Company, Los Angeles County Sheriff's Department, Manulife Financial, Universal Studios, US Department of Defense, and US Department of Veterans Affairs. Repeat customers in Q2 included BellSouth, Cablevision, California ISO, Deutsche Bank, Dresdner Bank AG, e2open, Sprint and UPC.

Partners

Vitria established or expanded strategic relationships with a number of systems integrators and independent software vendors in the second quarter. New partners in Q2 included NEC, a leading global systems integrator. Systems integrators continued to play a significant role in generating sales leads and helping to close new business, influencing well over 60% of business in the second quarter. To further accelerate penetration of new vertical markets, Vitria has partnered with a number of major systems integrators to develop and promote Vitria-based solutions targeted at the financial services, manufacturing and transportation industries.

(1) Including amortization of goodwill and other intangibles, and write-off of in-process Research and Development.

Products

Vitria delivered over 40 new product releases in the second quarter. These included additional EAI functionality for mainframe integration, plus an extended version of the company's B2Bi offering for inter-company integration and collaboration. As part of this enhanced B2Bi offering, the company delivered its first product based on the EDI and XML translation and transformation technology it acquired from XMLSolutions Corporation in April of 2001. This new product has already been sold to a number of customers. As part of the same B2Bi release, Vitria also delivered the Express B2Bi Partner Server, a new, lightweight product designed for smaller trading partners. The product can be downloaded over the Web, and is designed to be extremely quick and easy to install and use.

Vitria's product leadership was recently validated by an independent source in the second quarter when Gartner, one of the world's leading IT research and advisory firms, named Vitria as a leading vendor in their "Magic Quadrant" for integration broker software.

Conference Call

Vitria has scheduled a conference call today at 1:30 p.m. PST. The call is open to all parties. Those interested in participating may call 800/388-8975 or attend by webcast at www.vitria.com.

About Vitria

Vitria Technology, Inc. is a leading integration server provider. Vitria BusinessWare integrates applications and automates mission-critical business processes within and across the extended enterprise, reducing time to market, shortening lead times, lowering operating costs, and increasing customer satisfaction. Vitria is a global software company with over 25 offices in North America, and international offices in Australia, Canada, France, Germany, Italy, Japan, Korea, United Kingdom, Singapore, Spain, Switzerland and Taiwan.