Ascential Software, the global leader in the enterprise data integration market, has reported strong financial results for its third quarter ended 30 September.
Total revenue on a GAAP basis for Ascential was $30.2 million in the third quarter, up 8% from $28 million reported in the second quarter of 2002 and up 12% over $27 million in the third quarter last year. On a pro forma basis, which includes only revenue from the company`s ongoing data integration business, total revenue was $30 million, a 9% sequential increase over $27 million in the second quarter, and up 27% over the $23 million in the third quarter last year.
On a GAAP basis, net loss was $16 million, or $0,07 per share, for the third quarter, compared to a net loss of $20.6 million, or $0.08 per share, in the second quarter. On a pro forma basis, excluding amortisation of purchased intangibles, and items related to merger, realignment and discontinued product operations, the pro forma loss for the company`s ongoing data integration business was $5.8 million or $0.02 per share. This compares to a pro forma loss of $6.7 million or $0.03 per share for the second quarter of 2002.
"These results reflect Ascential`s continued solid progress," says Julian Field, GM of Ascential Software South Africa. "As the first and only vendor of an end-to-end enterprise data integration product suite, we are gaining increasing attention from prospects and customers, as they are attracted to the approach that Ascential has taken in building a comprehensive and scalable enterprise integration infrastructure."
The company continued to focus on controlling expenses, in part by reducing headcount by 10%, ending the quarter with 650 employees. Along with other cost reduction actions, this resulted in a charge of $4.6 million to pro forma continuing operations in the third quarter, and is expected, barring unforeseen circumstances, to result in a net reduction in total fourth-quarter costs and expenses of 10% to 12% compared to third-quarter total spending levels.
At 30 September, the company had $521 million in cash, cash equivalents and short-term investments. Major items affecting cash in the quarter were repurchases of stock, changes in working capital and operating loss. As previously stated, the company continues to expect that its cash balance will be $600 million at the start of 2003. It plans to be cash breakeven from continuing operations by the first quarter of 2003.
Third-quarter highlights:
* Signed 72 new clients, including 7-Eleven, Bank of America, Beckman Coulter, Hitachi America, Jenny Craig, Landstar System, Munich Reinsurance, Rockwell Automation and Yahoo.
* Expanded business with 112 existing customers including Bell Canada, Bombardier, Samsung, General Motors, Ingenix, Hartford Life, JP Morgan Chase, MedStat and New York Life Insurance.
* Experienced growing numbers of customers buying multiple components of its data integration suite: Bebe, Eastman Kodak, International Paper, Jenny Craig, Landstar System, New York Life Insurance and the US Department of Health and Human Services/Food and Drug Administration.
* Expanded business with IBM, closing joint transactions with new customers such as Bank of Thailand, Blue Cross Blue Shield of Michigan, Centerlink, Food Lion, Galleries Lafeyette, Irwin Mortgage, Pacific Healthcare Systems, Saint Paul Fire and Marine and Worldspan.
* Deepened market penetration with SAP, expanding joint pipeline and directly adding several new customers for Ascential`s SAP-related products, including International Paper, Eastman Kodak and Lufthansa.
* Introduced the Ascential Enterprise Integration Suite, which combines the company`s three data integration products for data profiling, data quality and data transformation on a common platform, all of which are enabled on its parallel processing architecture.
On the company`s outlook, Ascential president Pete Fiore notes: "We plan for 5% to 10% sequential revenue growth, an outlook reflecting the current macro IT spending environment. We remain focused on our goal of operating profitability, but based on current market conditions, even with our continued cost reductions and controls, we may not get all the way there in the fourth quarter. However, barring unforeseen circumstances, we are projecting the achievement of profitability on a pro forma net income basis, in the fourth quarter. We also project GAAP profitability in 2003 as our historical obligations from sold and discontinued product lines are wound down."
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