Informix Corp Wednesday had to report savage losses for its full fiscal 1997, as the company tries to struggle back into life after the brutal restructuring last November that resulted in a revenue reduction of $278m and a wipeout of reported earnings of $236m (CI No 3,294). The battered Menlo Park database supplier says it lost $356.9m in 1997 as a whole, compared to restated losses of $73.6m for 1996, on sales down to $662.3m from the restated revenues of $727.8m for 1996. In the fourth quarter Informix reports sales of $181.2m, down from restated sales of $216.8m for the same period last time, with net income of $9.2m, up from net restated losses of $7.0m for the same period in 1996, and down from $110.5m in the third quarter. CEO Bob Finocchio, describing the three months ending December 31st as the first quarter of the new Informix, chose to spend much of the conference call discussing the results comparing the fourth quarter sequentially with the third quarter, presumably so as to have something good to say – and also to emphasize the difference between his Informix and that of disgraced former CEO Phil White, ousted last summer, whose lax attitude to revenue recognition policies torpedoed the company in the first place. This made for some fairly meaningless markers of progress, since the fourth quarter is almost always the strongest for most IT companies, and comparing it against the third quarter means little in the long run. Nonetheless, let it be noted that Informix saw a 20.9% increase in revenue sequentially, and managed to turn in an operating profit of $17.8m, against third quarter operating losses of $6.2m. It also reported increased revenues in all geographies, this, with a burst of pride from Finocchio, including Asia Pacific. North America, with 44% of all Informix business, saw a 5.9% growth in sales, to $79.8m, EMEA (Europe, Middle East and Africa), representing some 36% of total revenues, went up from $44.8m to $66.0m, and Asia Pacific, at 11%, went up from $19.6m to $20.5m. CFO since last October Jean-Yves Dexmier took pains to stress how conservative the chastened Informix is in terms of booking revenue, with no transaction over $2.5m being closed in the fourth quarter; We will no longer desperately pursue big deals to make revenue, ignoring the loss in price. The company also cut staff in the period, with headcount now down from 3,745 at the end of the third quarter to 3,487, though the company says it will now reverse that trend, aiming to get new hires into both its R&D and customer service operations. Dexmier adds that the company has now managed to get its costs and run rate down to a level of $170m a quarter, and it ends the year cash positive to the tune of $155.5m. It has also closed the sale of its Santa Clara property, at one time earmarked by ever- optimistic White for a big-deal new campus, and in the quarter secured a lifeline with a $50m private offering of preferred convertible stock to a group of investors led by Credit Suisse First Boston, and a $75m revolving credit line has been confirmed, though this so far has not been drawn on. 1997 was a very difficult year for Informix, but the fourth quarter demonstrates solid progress toward our goals, concludes Finocchio. Although our work is far from complete, we have made progress on our way toward building the new Informix. Informix’s stock price, which had sunk to $4 from a 52-week high of $21.125, closed Wednesday up slightly at $7.375, and its market cap is now $1.12bn.
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