Unify earned $5.1 million in Q4 08, up 28%

Q4 08 Financial Results
Unify reported total revenues in Q4 08 of $5.1 million, up 28%, compared to the $4.0 million earned in the Q4 07. Software licence revenue increased 26% to $2.2 million ($1.7 million in Q4 07). Services revenue was up 30% to $2.9 million ($2.2 million in Q4 07). Gross margin was 89% (91%, in Q4 07).

Q4 08 income from operations totalled $245,000, compared to a loss of $281,000 in Q4 07.  Net income was $77,000 or $0.01 per share for Q4 08 compared to a net loss of $584,000 or $0.10 loss per share in Q4 07. Included in Q4 08’s operating results is a $276,000 charge for costs related to the closure of Unify’s German subsidiary.

Non-GAAP net income for the quarter was $606,000 or $0.08 per share, compared to a non-GAAP net loss of $279,000 or $0.05 loss per share in the same quarter of 2007. In addition to the closure of the German subsidiary, Q4 08’s operating expenses included approximately $100,000 for Sarbanes-Oxley compliance consulting and over $150,000 in year-end royalty and performance-based compensation adjustments.

Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for Q4 08 was $785,000 compared to a loss of $44,000 for Q4 07.

Fiscal 2008 Financial Results
For fiscal 2008 (“2008”), Unify reported total revenues of $19.8 million, up 77% as a result of organic and acquisition-related growth, compared to $11.2 million (2007).  Software licenses revenue for 2008 increased 93% to $8.5 million ($4.4 million for 2007). Services revenue was up 67%, to $11.3 million ($6.8 million for 2007).

Gross margin increased to 92% (87% in 2007). Income from operations was $2.7 million, including the $276,000 charge for costs related to the closure of the German subsidiary during Q4 08, compared to a loss from operations of $888,000 for 2007.
Net income for fiscal 2008 was $1.6 million or $0.23 per share, compared to a net loss of $2.8 million or a $0.47 loss per share for 2007. Non-GAAP net income was $3.1 million or $0.43 per share for 2008, compared to a net loss of $2.2 million or $0.38 per share in 2007. Adjusted EBITDA for 2008 was $4.1 million compared to a negative $279,000 for 2007.

Unify achieved positive cash flow from operations of $3.3 million, or 17%, for 2008, ending the year with total cash and cash equivalents of $2.7 million. Cash is up 56% sequentially from $1.7 million at the end of Q3 08 and up 30% year-on-year from $2.1 million at April 30, 2007. Fully diluted share count used for GAAP and non-GAAP earnings per share calculations in Q4 08 was 8.0 million.

Unify achieved annual growth across all metrics

“In our database and development software business, we grew our customer base, adding over 220 new customers in 2007-8. In addition, we launched enhanced products to meet the needs of our customers and broadened our geographic reach by gaining new customers in emerging markets such as Eastern Europe and Latin America. The software business remains strong with stable cash flow enabling us to grow our Composer* business in 2009.”

Wille continued, “In the last four months of fiscal 2008, we added seven new customers to our Composer* business for a total contract value above $1.1 million, of which $125,000 was accounted for in 2007-8. During Q4 08, we also closed four pilots and two multi-application migration projects as well as pilots that were closed in our Q3 08. For one customer, a successful pilot project led to a larger migration deal. We have a strong order book for 2009 and we are making additional investments in Composer, including resources to accelerate our Microsoft and EMC partnerships, to further penetrate the $2 billion Lotus Notes application market.”

FY09 Earnings Guidance
Based on current conditions, Unify believes it can achieve revenue growth of at least 10% and non-GAAP net income growth of at least 15% in fiscal 2009.

About Unify
Unify is a global provider of application modernization solutions. The company has a rich heritage of delivering enterprise software and services for modernizing and maximizing applications and data while providing significant and measurable return on investment for customers. Unify’s market-leading technologies help organizations drive business optimization, improve collaboration, increase customer service and reduce costs. Unify is headquartered in Sacramento, Calif., with offices in London, Munich, Paris, and Sydney.
For further information, visit www.unify.com or email us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Unify Composer
Unify Composer™ is a software package for automatically migrating Lotus Notes business applications to Web services and a service-oriented architecture (SOA). Composer enables organizations to share previously siloed data, reduce application license costs and eliminate the impediments to integration and collaboration within the IT enterprise.

Use of non-GAAP financial information
To supplement the Company's unaudited condensed consolidated financial statements presented in accordance with GAAP, Unify uses certain non-GAAP measures of financial performance. The presentation of these non-GAAP financial measures is not intended to be considered in isolation from, as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures used by other companies. In addition, these non-GAAP measures have limitations in that they do not reflect all of the amounts associated with the Company's results of operations as determined in
accordance with GAAP.