Unify Corporation Reports Record Third Quarter Results With Accelerating Revenue From E-Commerce Solutions - Company Financial Information

Edge: Work-Group Computing Report, Feb 21, 2000

Unify Corporation (NASDAQ: UNFY), a leading provider of e-commerce software, Tuesday announced results for the fiscal 2000 third quarter ended January 31, 2000.

Total revenues for the third quarter of fiscal 2000 were $10.1 million as compared to $8.1 million for the third quarter of the prior year, representing an increase of 25%. Revenue from Internet product license fees was $5.0 million, reflecting a 59% increase from the third quarter of last year. Total revenues from license fees were $7.1 million versus $5.3 million in the same period last year, an increase of 33%. License revenues represent 70% of total revenues in the current period, as compared to 66% for the third quarter of fiscal 1999. Third quarter fiscal 2000 net income was $2.8 million as compared to net income of $1.4 million in the same quarter last year, an increase of 100%. Earnings per share was $0.15 per basic share, $0.14 per diluted share, in the third quarter of fiscal 2000 versus $0.08 per basic share and diluted share for the third quarter of last year.

Revenue for the nine months ended January 31, 2000 totaled $28.0 million, as compared to $21.9 million in the first nine months ended January 31, 1999. Net income was $6.6 million as compared to $2.5 million for the same period last year, an increase of 164%. Earnings per share was $0.37 per basic share, $0.35 per diluted share, for the nine months ended January 31, 2000 versus $0.15 per basic share, $0.14 per diluted share, for the same period last year.

"The growing e-commerce market is resulting in significant opportunities for Unify. We are encouraged with the positive reception to Unify eWave, in addition to the continuing success of the entire Unify product portfolio," stated Reza Mikailli, president and chief executive officer. "As we continue to expand our partner programs we are experiencing increased demand for our e-commerce solutions from Internet solution providers and system integrators."

Sales for the third quarter include the following organizations: Actuate Corporation, Arsin Corporation, Bear Stearns, Boeing Defense and Space Group, Budweiser Japan, Canon, Coelba Brazil, Computer Sciences Corporation, Credit Lyonnais, Defense Logistics Agency, DigiTrade, Kubota Systems, Mysoft ASA, NEC, Nortel Networks, Physician Computer Network, and Sherwood Insurance.

Unify Corporation is a leading provider of Internet and end-to-end e-commerce solutions that enable businesses to deliver online trading communities quickly and cost effectively. Unify's professional services organization provides a full range of services to help customers successfully deliver their online initiatives. Unify's product line includes the Unify eWave, Unify VISION, Unify WebNow!, ACCELL/SQL and the Unify DataServer product families.

Headquartered in San Jose, California, Unify has direct sales offices throughout North America, Europe and Japan, with a global network of distributors, solutions integrators, OEMs, and over 400 vertical application partners delivering software solutions to millions of users in telecommunications, financial services, healthcare, commercial industries and government agencies. Unify product and service information is located on the World Wide Web at http://www.unify.com.

                        UNIFY CORPORATION
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (in thousands, except per share data)
                           (unaudited)

                      Three Months Ended     Nine Months Ended
                          January 31,             January 31,
                        2000        1999       2000         1999
                      --------    --------    --------    --------
Revenues:
 Software
 licenses-Internet     $ 5,002    $  3,139    $ 13,029    $  8,008
 Software
 licenses-ClientServer   2,102       2,204       6,490       6,303
 Services                2,997       2,734       8,506       7,626
                      --------    --------    --------    --------
   Total revenues       10,101       8,077      28,025      21,937

Cost of revenues:
 Software licenses         261         172         700         634
 Services                1,200       1,088       3,549       3,215
                      --------    --------    --------    --------
   Total cost of
    revenues             1,461       1,260       4,249       3,849
                       --------    --------    --------    --------
Gross margin             8,640       6,817      23,776      18,088
                       --------    --------    --------    --------
Operating expenses:
 Product development     1,562       1,457       4,719       4,390
 Selling, general
 and administrative      4,303       3,933      12,431      11,192
                       --------    --------    --------    --------
   Total operating
    expenses             5,865       5,390      17,150      15,582
                       --------    --------    --------    --------
   Income (loss)
     from operations     2,775       1,427       6,626       2,506

Other income, net          113          53         361         176
                       --------    --------    --------    --------
   Income (loss)
    before income taxes   2,888       1,480       6,987       2,682
Provision for
 income taxes              (113)        (72)       (354)       (160)
                       --------    --------    --------    --------
   Net earnings        $  2,775    $  1,408    $  6,633    $  2,522
                       ========    ========    ========    ========

Net income per share:
   Basic               $   0.15    $   0.08    $   0.37    $   0.15
                       ========    ========    ========    ========
   Diluted             $   0.14    $   0.08    $   0.35    $   0.14
                       ========    ========    ========    ========

Shares used in computing
 net income (loss) per share:
   Basic                 18,183      17,046      17,714      16,988
                       ========    ========    ========    ========
   Diluted               19,843      18,710      18,781      18,176
                       ========    ========    ========    ========

                        UNIFY CORPORATION
              CONDENSED CONSOLIDATED BALANCE SHEETS
                         (in thousands)
                           (unaudited)

                                  January 31,   April 30,
                                     2000          1999
                                    -------      -------
ASSETS

Current assets
Cash and equivalents
  and short-term investments        $15,198   $11,387
Accounts receivable, net              9,763     9,156
Prepaid expenses and
  other current assets                  897       732
                                    -------   -------
     Total current assets            25,858    21,275

Property and equipment, net           1,097     1,417
Other assets                          3,232       242
                                    -------   -------
     Total assets                   $30,187   $22,934
                                    =======   =======

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
   Accounts payable                 $ 1,059   $ 1,138
   Amounts due to minority
     interest stockholders              475       608
   Accrued compensation and
     related expenses                 1,604     1,650
   Other accrued liabilities          2,328     2,621
   Deferred revenue                   3,303     3,326
                                    -------   -------
        Total current liabilities     8,769     9,343

   Minority interest                    306       265

   Stockholders' equity              21,112    13,326
                                    -------   -------
       Total liabilities and
          stockholders' equity      $30,187   $22,934
                                    =======   =======