Portal Market Lifts Interwoven's 4Q Sales

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Interwoven said a strong portal market and strengthening confidence in the economy among enterprise customers helped drive sales of its content management technology in the fourth quarter and meet its earnings targets.

The company lost $27.3 million on sales of $44 million for the quarter ended Dec. 31, compared with a loss of $19.9 million on $54.6 million in sales for the prior-year period, the company said Thursday.

On a positive note, however, the company's quarter-to-quarter sales were up 2 percent and a loss of $3 million, or 3 cents a share, before charges beat the First Call consensus estimate by a penny.

CEO Martin Brauns said that in contrast to the second and third quarters--when economic uncertainty caused some customers to pull back on planned deployments--the company's close rates strengthened in the fourth quarter.

"All of the deals we were tracking in the fourth quarter did in fact come in," Brauns said, with the exception of a few deals tied to the Sept. 11 attacks. "I'm very proud in the compliance to forecast rate and the uncertainty lifting."

Interwoven said it signed 82 new license customers during the quarter, bringing its customer count to 930. License revenue accounted for 51 percent of sales, the company said.

Interwoven's average size of its sales declined as customers opted for single-deployment initiatives rather than full-scale enterprise deployments, officials said. "The good news about those single initiative opportunities is that they are shorter sales cycles," said COO John Van Siclen.

The company said providing content management infrastructure for portals has become the strongest market opportunity. Van Siclen said the opportunity was similar to what happened with e-commerce three years ago when companies were throwing up Web sites and then realizing they needed to some way to manage content.

"There is an accelerated interest in attaching content infrastructure underneath content portal initiatives," he said.

Van Siclen said the company expects to break even in 2002. The company also said partners influenced about 76 percent of its sales during the quarter, about the same as pervious quarters.

For the year, Interwoven reported $202.7 million in sales, up from $132.1 million the prior year. The company lost $124.7 million during the year compared with a loss of $32.1 million the prior year.

Interwoven on Thursday also reported that it reached an agreement with IBM to port its TeamSite software to the IBM AIX 5.1 operating system.

Interwoven's stock rose 5.9 percent on Thursday to close at $9.40 before the earnings announcement.

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