Interwoven Warns Sales Below Expectations

Interwoven

The company, based here, said its pro forma loss would range between 10 cents and 12 cents on sales of between $32 million and $33 million for the quarter ended March 31. Analysts had been anticipating a 4-cent loss on revenue of $42.7 million, according to First Call.

"We had an unfortunate compounding of weaknesses in our two biggest markets," said Martin Brauns, Interwoven chairman and CEO.

He said the company was still posting the same number of deals, but that customers were delaying purchases as a result of more stringent budget approval processes. He said the slowdown hit in the latter part of March because of budget approval problems and "a general lack of a sense of urgency."

Interwoven executives, who plan to detail a new set of solutions offerings later this month, said the company is targeting opportunities in portals, Intranets, Web services and what it calls documents-to-Web solutions.

The company reduced its workforce by 87 employees during the first quarter and still expects to reach profitability in later part of this year, said Interwoven CFO David Allen.

About 57 of the positions came in support staff for the sales organization, Allen said, adding that the company actually increased the number of quota-carrying sales representatives as it shifts to a sales model that makes less use of telemarketing and sales engineer employees.

"It's very appropriate now to work to a model that is richer on quota-carrying salespeople ... because the market is maturing," he said.

On Monday, another content management software vendor, Documentum, said it expected its sales to come in at the high end of its guidance of $50 million for the quarter. Analysts had been anticipating sales of about $48.5 million.