VerticalNet financial figures are improving but still didn’t turn black. Nor is improving its revenue stream: only 16M$ in 2006 compared to 20M$ in 2005. It’s a pity for such a quality technology provider – vision and features always impressed prospects, as far as I know – which suffers – and will suffer – from Global-2000 minimal-risk management approach (not contracting with non-profitable vendors), especially when forecasted break-even date is not even mentioned in the quaterly report…
Consolidation looks like a serious alternative for the future, but with whom and when… it depends on how long VerticalNet can run its business, as is, with 2M$ cash still available and a net-operating loss of 720K$ in Q4-06.
Below are some interesting excerpts of VerticalNet’s Q4-06 financial report (March 6-07):
“2006 was a year of transition for Verticalnet. Our reliance on the revenues from two legacy customers was largely eliminated, as was the requirement to support legacy products, thus enabling us to greatly reduce our cost base. Meanwhile, our on-demand solutions continued to drive an increasing percentage of our total revenue,” stated Nathanael V. Lentz, President and CEO of Verticalnet.
- Revenues for the quarter ended December 31, 2006 were $3.9 million, as compared to $5.4 million for the quarter ended December 31, 2005.
- Net loss for the quarter ended December 31, 2006 was $2.5 million, as compared to a net loss of $2.9 million for the quarter ended December 31, 2005.
- Adjusted net loss from operations for the quarter ended December 31, 2006 was $720,000 as compared to an adjusted net loss from operations of $1.4 million for the quarter ended December 31, 2005
- Cash balance as of December 31, 2006 was $2.8 million, increasing by $342,000 as compared to the cash balance of $2.5 million as of September 30, 2006 and decreasing by $1.8 million as compared to the cash balance of $4.6 million as of December 31, 2005. Verticalnet paid $860,000 in cash for debt service during the quarter.
- Total software and software related revenues increased to $2.2 million for the fourth quarter of 2006, a modest increase over the $2.1 million in software and software related revenue recognized in the fourth quarter of the prior year. Services revenues for the fourth quarter of 2006 were $1.7 million as compared to $3.3 million for the comparable period in the prior year. The decline in service revenues was driven by a $1.7 million decline in revenues from two of Verticalnet’s largest historical accounts, which reflected revenues from legacy solutions that are not part of the Company’s future planned product offerings. Revenue from these two large historical accounts accounted for 9% of total revenue in the fourth quarter of 2006 as compared to 37% of revenue in the fourth quarter of 2005.
- In February 2007, Verticalnet announced the release of Verticalnet XE 5.4. Enhancements were developed in conjunction with customer feedback on best practices and ongoing market research and focused on emerging trends within the supply management field. The enhanced functionality of Verticalnet XE 5.4 specifically addresses the following emerging customer priorities: