Centra Ends SmartForce Deal, Sees Revenue Shortfall

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Centra Software Inc., a Web software specialist, on Tuesday said it terminated its planned acquisition by SmartForce and that it expects first-quarter revenues to miss estimates due to a shortfall in North American license sales.

Centra said it expects first-quarter revenues in the range of $7.4 million to $7.7 million, blaming the shortfall in license sales on the recession.

Excluding noncash stock-based compensation expenses, the amortization of goodwill and other intangible assets, and other merger-related costs, net loss for the first quarter is expected to be $4.2 million to $4.7 million, or 17 cents to 19 cents a share. Analysts on average were expecting a loss of 7 cents, according to Thomson Financial/First Call.

On a GAAP basis, Centra said it expects a net loss of $5.6 million to $6.2 million, or 22 cents to 25 cents a share, including $1 million, or 4 cents a share costs related to the prospective merger with SmartForce.

Centra and SmartForce said in a separate release that the two companies decided to enter into a reseller and co-marketing partnership instead of the merger.

Under the terms of the partnership, SmartForce, a maker of electronic learning products, will have the right to resell Centra's CentraOne knowledge delivery and management software. Both companies will have the right to co-market each other's products.

Shares of Centra closed off 19 cents at $4.73, a drop of nearly 4 percent, on the Nasdaq.

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