The database software maker also reported a larger third-quarter loss than Wall Street had expected.
But on an encouraging note, the company--which faced the possibility of having its stock removed from Nasdaq--now believes it is in compliance with Nasdaq's listing requirements. The company expects to get approval as early as tomorrow to begin trading under its regular ticker symbol as of Thursday. The company noted that there also is potential for improvement in its financial picture, given its access to nearly $200 million from investors, a revolving credit line, and its sale of real estate.
"This represents a lot of progress in the last 100 days," said Bob Finocchio, Informix chairman and chief executive. "We've finished our restatement, did a through review of our operations, and did it the right way."
Finocchio further characterized the company as moving from the "old Informix and onto the new."
The company's future, however, is not without challenges. For the moment, Informix is struggling to get its financial footing. Revenues for the third quarter ended September 28 reached $149.9 million, and the company posted a net loss of $110.7 million, or 73 cents per share. Excluding a restructuring charge of $49.7 million, Informix would have posted a loss of $61 million, or 30 cents a share.
That fell far short of analysts' expectations of a loss of 21 cents per share, according to First Call.
Comparable year-ago revenue and net income figures were not immediately available.
"This was a very weak quarter, but this was expected, particularly in light of the uncertainty caused by the announcement of our extended financial review process and the financial restatement we made during the period," Finocchio said.
He noted that the company will make a concerted effort to woo new customers and reassure old ones that it has moved beyond its financial debacle. He added that its sales department will focus on landing business that will provide an ongoing relationship, rather than on larger one-shot deals.
"This may mean smaller deals with customers," he said.
Following an audit of its accounting practices, Informix said it has restated results for 1994, 1995, 1996, and the first and second quarters of 1997. In August, the company said it would restate results only for 1996, but later expanded the audit to include 1995 due to what it called "errors and irregularities" in previous years' financial reports.
As a result of the restatement, revenues for the period of January 1994 to June 1997 have been revised downward by $278 million, while income has been decreased by $236 million.
Informix's efforts to get back on track are also frustrated by an SEC formal investigation that was launched in July. But Finocchio said the news of the investigation came as no surprise to the company.
"In light of the restatement, we are not surprised there is an SEC investigation, and we are cooperating fully," he said, declining to elaborate further on the details of the case.
"This is a private investigation, and we decided to disclose it because of the rumors," Finocchio said, adding that the company was under no obligation to disclose the investigation and did not announce it sooner under advice of counsel.
But the company is looking ahead after securing some much-needed funding, and has sold off some assets.
Informix has completed a $50 million convertible preferred private placement. The placement is led by an affiliate of Credit Suisse First Boston and includes affiliates of Castle Creek Partners and Heights Capital Management. That follows Informix's August announcement that it had secured a $40 million equity investment by Fletcher International. The company also said it has received a commitment letter for a $75 million, two-year revolving line of credit from Bank of Boston and Canadian Imperial Bank of Commerce. In addition, the company has sold off land in Santa Clara, California, that originally was intended to be the site of its planned $60 million headquarters.
"Our cash position is now strong, and we have more than sufficient liquidity to run the business," he said.
Finocchio said that Informix has made "significant progress" toward rebuilding the company, pointing out that the company has reduced operating expenses from approximately $235 million in the first quarter of 1997 to approximately $195 million, with a current run rate below $185 million.
Finocchio also said the company has reduced its workforce, from 4,500 at the end of 1996 to approximately 3,600 currently.
The company is scheduled to announce a new pricing and packaging plan tomorrow aimed at making its database software more attractive to potential buyers.
Additionally, Informix will move to a single server model, the Informix Dynamic Server. This will take a basic server and make it easier to buy products and add configuration options to it, Finocchio said.
"This dynamic server will be simpler and upgradeable," he added. "As a business advances, they will have options they can add."
All of these moves are part of Informix's attempt to regroup after a series of blows.
In July, CEO Phil White resigned as chairman and left Informix's board of directors. Bob Finocchio, who replaced White as CEO, subsequently was elected to the chairman's post.
White had been under fire from angry shareholders, some of whom had called for his resignation at the company's annual shareholder meeting in May. Investors blamed White for Informix's sinking fortunes in recent months, as it shifted its marketing and technical efforts toward its new object-relational Universal Server while scaling back work on its bread-and-butter Online Dynamic Server database.
Also in May, CFO Alan Henricks departed after only five months on the job. His replacement, Jean-Yves Dexmier, was named to the CFO post last month.
Finally, Informix has been hit with a handful of class-action lawsuits that are still pending. Investors charge the company with misrepresenting its revenues, prospects for profitable growth, and other financial results.