CIMdata PLM Industry Summary Online Archive

10 November 2004

Financial News

netGuru Inc. Reports Second-Quarter, Six-Month Fiscal 2005 Results

netGuru, Inc. reported financial results for its fiscal 2005 second quarter ended September 30, 2004.

Net revenues for the fiscal 2005 second quarter totaled $3.9 million, compared to $4.0 million for the second quarter of last year. Core engineering and collaborative software and services revenues for the fiscal 2005 second quarter rose to $2.8 million from $2.7 million for the second quarter of last year, while IT services fell to $1.1 million from $1.3 million for the second quarter of last year. Higher software sales and services revenues were attributed to enhanced corporate sales efforts, while lower IT services revenues reflected less emphasis on the lower margin direct placement services and more emphasis on the development of higher margin IT and business process outsourcing (BPO) services from India.

Fiscal 2005 second-quarter consolidated gross margins rose to 78% from 68% for the second quarter of last year, primarily due to revenues from engineering and collaborative software and services contributing a greater share of total revenues, compared to second quarter of last year, and higher margins from those revenues compared to margins from IT services. Gross margins from engineering and collaborative software sales and services revenues were 93% for the fiscal 2005 second quarter, and gross margins from IT services revenues were 36% for the same quarter.

Operating expenses for the fiscal 2005 second quarter declined to $3.0 million, or 78% of revenue, from $3.4 million, or 85% of revenue, in the second quarter of last year. Sales, general, and administrative (SG&A) costs fell and research and development (R&D) expenses also declined.

Operating loss for the fiscal 2005 second quarter was $4,000 versus operating losses of $670,000 for the same quarter last year.

For the fiscal 2005 second quarter, netGuru reported a net loss of $61,000, or $0.00 per share, compared to a net loss of $767,000, or $0.04 per share, for the second quarter of fiscal 2004.

Net revenues for the six months ended September 30, 2004, were $7.4 million, compared to $7.9 million for the six months ended September 30, 2003. Consolidated gross margins increased to 75% for the six months ended September 30, 2004, from 69% during the same period in the prior fiscal year due to the growing proportion of revenues from engineering and collaborative software and services compared to IT services revenues, and higher margins from engineering and collaborative software and services.

Total operating expenses for the six months ended September 30, 2004, declined to $6.1 million from $6.4 million during the same period in the prior fiscal year due to lower SG&A expenses. Operating loss fell to $539,000 from an operating loss of $948,000 in the first six months of fiscal 2004. Net loss for the six months ended September 30, 2004, was $799,000, or $0.04 per share, compared to a net loss of $1.2 million, or $0.07 per share, for the six months ended September 30, 2003.

netGuru Chairman and Chief Executive Officer Amrit Das commented: "We are pleased to report higher revenues in software and related services sales, lower operating expenses, better operating results, and a nominal net loss for the fiscal 2005 second quarter, all significant improvements from the second quarter of last year and consistent with our earlier reported outlook.

"These improving numbers are the result of management's ongoing focus on building and extending our core engineering capabilities through enterprise sales, streamlining by divesting marginal operations, and controlling costs in all areas," Das continued. "Streamlining and cost reductions have freed the resources for netGuru to now scale-up core operations and focus on increasing enterprise sales efforts for engineering and collaborative software sales and engineering services.

"We are now in the second half of our fiscal year, and our third and fourth quarters have, historically, been the strongest quarters for sales and sales growth," stated Das. "Looking forward, we expect to see continuing revenue growth not only from our core areas but also from potential opportunities in business process outsourcing. In addition, we expect revenue growth to also lead to further improvements in operating and net results, as our cost-control efforts are realized, and the beneficial effects on our results become more apparent."

netGuru is an engineering information technology and services company offering engineering and design collaborative software solutions and professional and technical IT services and support to businesses worldwide.

Full financials and the financial teleconference are available at http://www.netguru.com/News/InvestorRelations.asp

 

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