BVSN

BroadVision, Inc. (BVSN)

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BroadVision, Inc. (BVSN)

Q3 2012 Earnings Conference Call

October 24, 2012 05:00 p.m. ET

Executives

Peter Chu – VP, Strategy & Product Management

Shin-Yuan Tzou – CFO

Analysts

James Fenkner – Redstar Management

Presentation

Peter Chu

Good afternoon everyone. My name is Peter Chu , Vice President of Strategy and Product Management at BroadVision. Welcome to our 2012 Q3 Financial Results Announcement and Conference Call. I will first provide our standard cautionary comments on forward-looking statements and other legal matters. Next, Dr. Shin-Yuan Tzou, our CFO, will review the third quarter results which were announced in a press release earlier this afternoon.

Next I will provide product and marketing updates and wrap up with a summary.

As always we will be pleased to take your questions following the formal portion of the call. During the course of this conference call BroadVision may make forward-looking statements. All forward-looking statements included in this call are based upon information available to BroadVision as of the date of this call, including statements regarding our expectations of future financial results and product releases and BroadVision assumes no obligation to update or correct any such forward-looking statements. These statements are not guarantees of future performance and actual results could differ materially from BroadVision’s current expectations.

Actual future results may be impacted by various important factors including without limitation, changes in the market, competitive environment and macroeconomic conditions. Additional information on potential factors that could affect the company’s financial results is included in the company’s periodic reports on forms 10-K and 10-Q and other documents filed with the SEC.

All statements and information can also be found on our website at www.broadvision.com under the Company/Investor Information/Press Releases page. You can also view our SEC filings and historical financial results under the Company/Investor Information/SEC filings page.

Now I will turn the call over to Shin-Yuan.

Shin-Yuan Tzou

Thanks, Peter. Now our Q3 2012 results in terms of P&L, balance sheet and other operating highlights. Q3 total revenues were $3.6 million with $1.3 million in licenses, $1.7 million in maintenance and $0.6 million in consulting services. Sequentially this compares to Q2 ‘12 total revenues of $3.6 million with $1.2 million in licenses, $1.7 million in maintenance and $0.7 million in consulting services. In comparison, Q3 2011 total revenues were $4.2 million with $1.3 million in licenses, $2.1 million in maintenance and $0.8 million in consulting services.

Q3 ‘12 revenues by region were 44% Americas, 35% EMEA and 21% APJ compared to 41% Americas, 36% EMEA and 21% APJ in Q2 ‘12 and 37% Americas, 37% EMEA and 26% APJ in Q3 ‘11.

As we have discussed in the past, we expect our geographical mix to fluctuate somewhat from quarter to quarter mainly due to our small footprint.

Expenses, on GAAP basis, total operating costs plus costs of revenues were $4.9 million in Q3 ‘12 compared to $5.4 million in Q2 ‘12 and $5.3 million in Q3 ‘11. In Q3 ‘12, we generated a GAAP net loss of $66,000 or $0.01 per basic and diluted share compared to a net loss of $2.5 million or $0.54 of per basic and diluted share in Q2 ‘12 and a net loss of $1.6 million or $$0.36 per basic and diluted share in Q3 ‘11.

Q3 ‘12 results benefited from three one-time items. First, we received $785,000 cash previously (inaudible) on our investment sales as reported in our 10-Q for Q3 2010. Second, we reversed a $300,000 litigation expense accrual which was a non-cash credit redeemable for our software products as reported also in our 10-Q for Q3 2010. This credit expired in Q3 ‘12 and used. Third, we recorded a foreign exchange gain of $433,000, the company does not engage in active foreign currency trading. The foreign exchange gain was due to book adjustments of certain balance sheet items primarily our deposit in Europe to reflect dollar exchange rate fluctuations during the quarter.

Looking at our four main cost centers, first costs of goods sold, concentrated mainly on cost of services and the cloud hosting was $1.2 million in Q3 ‘12 same as in Q2 ‘12. Sales and marketing expense for Q3 ‘12 was $1.3 million down from $1.5 million in Q2 ‘12, primarily due to the 300 K accrual reversal mentioned earlier.

Finally, G&A expenses for Q3 ‘12 was $0.9 million compared with $1.1 million in Q2 ‘12. Balance sheet, as of September 30, 2012; we had $52 million of cash and cash equivalents and short-term investments with no long-term debt same as at the end of Q2 ‘12.

We have no exposure to any auction raised securities or ARS. Account receivables were $2.2 million at the end of Q3 ‘12 compared to $2.8 million Q2 ‘12. Base shares outstanding in Q3 ‘12 was 55 days compared to the 71 days in Q2 ‘12.

Prepaid expenses and other current assets were $2.1 million at the end of Q3 ‘12 compared to $2.4 million in Q2 ‘12. Other non-current assets was $0.5 million at the end of Q3 ‘12 compared to $0.6 million in Q2 ‘12.

Account payables were $0.7 million at the end of Q3 ‘12 compared to the $0.5 million at the end of Q2 ‘12. Accrued expenses were $2.0 million at the end of Q3 ‘12 compared to $2.3 million in Q2 ‘12. Accrued maintenance was $2.8 million at the end of Q3 ‘12 compared to $3.3 million in Q2 ‘12. Non-current revenues were $1.8 million at the end of Q3 ‘12 compared to $2.3 million in Q2 ‘12. Other non-current liabilities were $1.2 million at the end of Q3 ‘12 compared to the $1.1 million in Q2 ‘12.

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