Financial: Informix Announces Results for Fiscal Third Quarter Revenue Increases Year-over-Year and Sequentially - Company Financial Information

Edge: Work-Group Computing Report, Oct 26, 1998

Informix Corporation (NASDAQ:IFMX), the technology leader in enterprise database-powered solutions, Wednesday announced financial results for the third fiscal quarter ended September 30. Revenue was $185.2 million, an increase of 23 percent from the $150.2 million posted in the year-ago quarter and an increase of 6 percent from the $174.2 million recorded in the prior quarter. Third quarter net income applicable to common stockholders was $18.4 million, or $.10 per share on a diluted basis, compared with a net loss of $110.5 million, or $.73 per share, in the third quarter of 1997.

License revenue of $96.3 million was up 24 percent from the prior year and 12 percent sequentially. Service revenue grew 22 percent from the third quarter of 1997 to $88.9 million, and increased slightly from the prior quarter's $88.2 million. The regions of North America and Europe both posted year-over-year and sequential revenue growth, increasing to $92.3 million and $59.7 million, respectively. Revenue of $20.5 million in the Asia/Pacific region increased 5 percent from the year-ago quarter, but declined slightly on a sequential basis. Revenue of $12.6 million in the Latin America region increased 9 percent from the third quarter of 1997, but declined 17 percent from the previous quarter, due largely to local economic conditions and currency fluctuations.

"I am pleased we were able to show year-over-year and sequential growth, as well as continued improvement in our operating profit," said Bob Finocchio, Chairman and Chief Executive Officer of Informix. "We continue to focus on those market segments where we have competitive advantage, including high-performance on-line transaction processing, data warehousing and web/e-commerce. I believe these markets represent very attractive growth opportunities for Informix."

During the third quarter, Informix: o Strengthened its European management team with the appointment of Richard Snook to the position of President, Europe, Middle East and Africa. Mr. Snook, formerly vice president of group marketing with Bull in France, brings 28 years of management, sales and marketing experience in the high technology arena to Informix.

o Announced Decision Frontier Solution Suite, a complete data warehousing solution that combines best-of-breed products and technologies from Informix, Ardent Software and Seagate Software in a single, scalable solution capable of handling all major data warehousing tasks. By providing capabilities such as the automated transfer of OLTP information to data warehouse/data mart applications, Decision Frontier Solution Suite provides a powerful, integrated platform on which to build analytic applications such as one-to-one marketing, fraud detection, and customer turnover analysis.

o Shipped the first enterprise-quality database solution for the increasingly popular Linux operating environment.

o Hosted the Informix Worldwide Users Conference in Seattle, WA. With tutorials and special interest sessions, the event served to re-affirm Informix's commitment to open, leading-edge database technology and superior customer and developer support.

o Aligned its marketing, development and consulting organizations around key market opportunities, creating new Data Warehousing and Web/e-commerce Divisions. Led by Leonard Palomino and Wes Raffel, respectively, these new divisions will aggressively focus on building Informix's markets in these areas.

To accelerate its growth in the data warehousing market, on October 7, Informix announced a definitive agreement to acquire Red Brick Systems, Inc., a pioneer in data warehousing and data mart solutions, in a purchase transaction that will exchange 0.6 share of Informix common stock for each share of Red Brick Systems common stock. The transaction, which is subject to regulatory and Red Brick stockholder approval, is anticipated to close before the end of the year and will result in the issuance of approximately 7.6 million shares of Informix stock. Red Brick's technology will be added to the Decision Frontier Solution Suite for building scalable, high performance data warehouses and data marts.

Informix Corporation, based in Menlo Park, California, provides innovative database products that assist the world's major corporations attain competitive advantage. Informix is widely recognized as the technology leader for corporate computing environments ranging from small workgroups to very large parallel processing applications. Informix's database server, application development tools, superior customer service, and strong partnerships enable the company to be at the forefront of major information technology solution areas including data warehousing, high performance OLTP, and Web/e-commerce. FMI: http://www.informix.com.

                   Informix Corporation
          Condensed Consolidated Balance Sheets
                     (in thousands)
                                    September 30,    December 31,
                                        1998            1997
                                    ____________    ____________
                                     (unaudited)
ASSETS
Current assets:
  Cash and short-term investments  $  156,414     $   155,465
  Accounts receivable, net            151,637         142,048
  Deferred taxes                       44,717          12,249
  Other current assets                 25,182          26,243
                                    ___________     ___________
   Total current assets               377,950         336,005
Property and equipment, net            75,864          96,012
Software costs, net                    37,972          40,854
Deferred taxes                         18,046          56,345
Long-term investments                  14,655               -
Intangible assets, net                  6,615           8,277
Other assets                            7,242          25,751
                                  _____________     ___________
   Total assets                    $  538,344   $   563,244
                                  =============     ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                 $   24,693      $   36,155
  Accrued expenses                     44,681          64,538
  Accrued employee compensation        47,819          49,154
  Income taxes payable                  4,947           3,031
  Deferred income taxes                 1,086               -
  Deferred maintenance revenue        115,485         100,828
  Advances from customers and financial
    institutions                      139,304         180,048
  Accrued restructuring charges         9,085          26,597
  Other current liabilities             5,248          15,802
                                   __________      __________
   Total current liabilities          392,348         476,153
Other liabilities                       4,467           6,311
Deferred taxes                         14,895          21,716
Stockholders' equity:
  Convertible preferred stock              -                3
  Common stock                          1,723           1,526
  Additional paid-in capital          373,136         347,582
  Accumulated deficit                (245,000)       (278,144)
  Unrealized gain (loss) on available-
    for-sale securities, net of tax     3,083            (767)
  Foreign currency translation
   adjustment                          (6,308)        (11,136)
                                    _________       __________
   Total stockholders' equity         126,634          59,064
                                    _________       __________
   Total liabilities and
     stockholders' equity           $ 538,344       $ 563,244
                                    =========       =========
                    Informix Corporation
        Condensed Consolidated Statements of Operations
            (in thousands, except per share data)
                 Three months ended         Nine months ended
              Sept. 30,     Sept. 28,     Sept. 30,   Sept. 28,
                 1998         1997          1998        1997
              _________     _________     ________      _______
             (unaudited)                 (unaudited)
Net revenues:
 Licenses     $  96,334     $  77,437     $ 265,731   $ 273,081
 Services        88,877        72,747       254,680     209,532
            ___________   ___________   ___________  __________
                185,211       150,184       520,411     482,613
Costs and
expenses:
  Cost of
  software
  distribution    8,569        11,793        26,661      52,860
  Cost of
  services       38,467        40,493       113,404     128,197
  Sales and
  marketing      64,799       101,946       193,716     347,906
  Research and
  development    34,863        34,106       107,673     108,420
  General and
  administrative 20,645        18,144        50,549      72,110
  Write-off of
  goodwill and
  other long-
  term assets         -             -             -      30,473
  Write-off of
  acquired
  research &
  development         -             -             -       7,000
  Restructuring  (2,572)       49,733        (7,255)    109,356
            ___________   ___________    ___________  _________
                164,771       256,215       484,748     856,322
            ___________   ___________    ___________  _________
  Operating
  income (loss)  20,440      (106,031)       35,663    (373,709)
Interest income   2,488         1,290         6,359       3,691
Interest expense (1,416)       (2,103)       (4,582)     (6,839)
Other income
(expense),net    (2,494)         (879)       (2,396)     17,596
             ___________   ___________   ___________  ________
Income (loss)
before income
taxes            19,018       (107,723)      35,044    (359,261)
Income taxes          -          2,800        1,900       6,800
             ___________   ___________   ___________  __________
Net income
(loss)           19,018       (110,523)      33,144    (366,061)
             ___________   ___________   ___________  __________
             -----------   -----------   -----------  ----------
Preferred stock
dividend           (589)          -          (1,816)        -
Value assigned
to warrants         -             -          (1,982)        -
             ___________   ___________   ___________  __________
Net income (loss)
applicable to
common stock-
holders      $   18,429      $(110,523)   $  29,346   $(366,061)
             ___________   ___________   ___________  __________
             -----------   -----------   -----------  ----------
Net income
(loss) per
common share
  Basic      $     0.11     $   (0.73)    $   0.18    $   (2.41)
  Diluted    $     0.10     $   (0.73)    $   0.17    $   (2.41)
Weighted average
number of common
shares outstanding
  Basic         169,077       152,352      165,711      151,708
  Diluted       182,272       152,352      171,406      151,708