Vignette on Monday announced preliminary financial results for the fourth quarter of 2001 and says it expects to report a larger operating loss than previously anticipated.
Vignette officials say the company expects $50 million to $52 million in total revenue, a major drop from the October forecast of $62 million to $72 million. Vignette on Monday forecast a core operating loss in the range of $13 million to $16 million, and a core net loss is expected to be in the range of 4 cents to 6 cents per share, excluding certain non-cash and one-time charges. The previous expectation was a loss of 1 cent to 3 cents a share. In addition, Vignette expects to record a non-cash charge related to the impairment of a significant portion of the Company's $1 billion in intangible assets.
"We expect license revenue to be between $20 [million and $22 million, with service and maintenance revenue of approximately $30 million," Peters says. "Clearly, our license revenue performance was disappointing. I don't believe these results reflect the current state of the company."
Peters says 2001 budget constraints have hurt software sales. The average size of a deal for Vignette dropped from $300,000 to $256,000 with new customers during the quarter. But Peters says the services revenue exceeded the expectations of the company and customers and analysts were enthusiastic about Vignette's new content management platform, Content Suite V/6, which was launched in October. Vignette says it has approximately 100 customers currently upgraded or in the process of upgrading to V/6.
Vignette officials say the company has implemented cost-saving measures to improve financial performance but have not indicated the measures would include additional layoffs. Vignette did, however, make some personnel changes. Peters named Peter Espinosa, formerly vice president of North American sales, to acting senior vice president of worldwide sales and operations to replace Dan Lautenbach, who left the company recently. Lautenbach previously served as head of sales at IBM before joining Vignette as one of several experienced executives who joined the software maker at its height.
Peters says Vignette president and COO Tom Hogan, who joined the company last year after heading Siebel System's sales team, will take more control of the company's sales organization. Hogan says Lautenbach is a "seasoned and capable" sales executive but that there was a "mismatch" between him and Vignette.
"We've spent the last six months rebuilding the entire sales executive team," Hogan says. "We feel pretty confident in the team we now have in place for 2002."
Vignette's stock was down more than 20 percent on Monday. to approximately $4.30 at midday trading on the Nasdaq.