Second generation client/server application development software company Unify Corporation is warning of poor results due to failed payments on two large contracts in the People’s Republic of China. For its third quarter Unify is predicting results significantly below expectations, with turnover at only $2.5m, significantly down from the previous two quarters. This will result in a pretax lost of $8.0m, including $1.0m bad debt expense on yet another large contract in China, and further one- time charges (for undisclosed reasons) of $1.2m. The main problem seems to be the writing off of a $2.8m contract it recognized in the first quarter, the payments for which are in default. Unify, which became a public company only last June after a sometimes difficult 16-year history as a private operation, has won analyst praise for its Vision and Vision/Web tools, which compete in the same space as Forte and Seer. But the company seems to be struggling to make a mark on the landscape; after its IPO high of $16 (offered at $12) the share price closed Friday at just under $4. Unify lost money in every one of its last four years as a private concern – $2.7m in 1993, $7.1m in 1994, $479,000 in 1995 and $938,000 in 1996 up until the end of April, according to its IPO documents. Its first quarter as a public company was OK – net income up to $187,000 from net losses of $979,000 for the same period in 1995, on revenue up 48% to $9.0m. But its second quarter was disappointing, with net losses of $1.6m on sales of $7.3m. Unify will now have to report a monster fourth quarter if it has any hopes of ending its first year as a public company in profit.
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