For the first quarter of its fiscal year 2004, Saba reported a net loss of $5.9 million, up from a net loss of $1.9 million in the year-ago quarter. The loss included a charge of $2.1 million for the settlement of patent litigation and restructuring.

Revenue for the quarter ending August 31 fell 43.8% to $8.2 million, from $14.6 million a year ago. Services revenues made up the bulk of the quarter’s revenue, contributing $6.6 million to the total revenue of $8.2 million, but license revenues fell 80% to $1.5 million, down from $7.4 million in the year-ago quarter.

We are disappointed that a number of deals were pushed out of the quarter. Our efforts are now focused on improving sales execution and we hope to conclude these transactions as soon as possible, said Yazdani.

Michael Moritz, general partner of Sequoia Capital and a Saba director since August 1998, said: Saba needs the complete dedication and passion that only a founder can bring. It also must start generating cash in a consistent and predictable fashion. Bobby has the conviction required to lead the company and understands that Saba’s future will be dictated by bottom-line necessities. He has the unqualified support of the entire board of directors.

Yazdani founded Saba in 1997 and took the company public in 2000. He led the company as Saba’s chief executive officer until March 2002, but remained a director and officer.

I am clearly disappointed with Saba’s sales performance, said Yazdani. I am looking forward to assuming my new role as chairman and CEO and restoring the company’s momentum. I have four immediate objectives: first, to align our sales organization to successfully execute our sales plan; second, to drive to profitability; third, to introduce our next-generation products; and fourth, to maintain Saba’s relentless commitment to customer satisfaction.

Redwood Shores, California-based Saba ended the quarter with a shrinking cash pile, with $19.2 million in cash and cash investments, down from $21.1 million at the end of May.

Looking forward, the company said it expects a GAAP net loss per share to be in the range of $0.10 to $0.17 in its second quarter ending November 30, on revenue between $8.5 million to $9.5 million. Saba believes that net income will be positive in the third and fourth quarters ending February 29 and May 31, 2004 respectively.

Back in May, Saba resorted to a reverse stock split to avoid being de-listed from Nasdaq. Reverse stock splits used to be considered the last gasp of a dying company, but have become more common because technology stocks have been so depressed. Companies that have used the tactic to try to avoid a de-listing include Commerce One, AT&T, and Palm.

This article was based on material originally published by ComputerWire