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Revenues
Total revenues for the year ended December 31, 2006 were $52.0 million, down $8.1 million, or 13.5%, from $60.1 million for the prior year. License revenue from the sales of software licenses increased from $14.7 million to $15.2 The increases were mainly due to increased license sales to existing customers in North America. License revenue in Europe declined due to our consolidation of operations and sales organizations in this region. Maintenance revenue, which is generally derived from maintenance contracts sold with initial customer licenses and from subsequent contract renewals, declined from $26.3 million to $24.7 million due to certain customers choosing to not fully renew maintenance contracts, together with the decline in new license revenue. Consulting revenue, which is generally related to services in connection with our licensed software, declined from $19.1 million to $12.0 million, primarily due to lower employee and third-party contractor headcount, and the resulting decline in capacity. This results from the lagging effect caused by declining license revenues in prior quarters; consulting
Total revenues for the year ended December 31, 2005 were $60.1 million, down $17.9 million, or 23%, from $78.0 million for the prior year. License revenue from the sales of software licenses declined from $26.9 million to $14.7 million due to fewer license transactions, in part due to uncertainty among current and potential customers about our long-term financial viability. Maintenance revenue, which is generally derived from maintenance contracts sold with initial customer licenses and from subsequent contract renewals, declined from $31.2 million to $26.3 million due to certain customers choosing to not fully renew maintenance contracts, together with the decline in new license revenue. Consulting revenue, which is generally related to services in connection with our licensed software, declined from $19.9 million to $19.1 million, primarily due to lower employee and third-party contractor headcount and the resulting decline in capacity.
Cost of Revenues
Cost of (credit for) software licenses includes the net costs of product media, duplication, packaging, and other manufacturing costs as well as royalties payable to third parties for software that is either embedded in, or bundled and sold with, our products.
Cost of services consists primarily of employee-related costs, third-party consultant fees incurred on consulting projects, post-contract customer support and instructional training services.
Years Ended December 31,
2006 % 2005 % 2004 %
(Dollars in thousands)
Cost of (credit for) software licenses(1) $ 258 2 % $ (38 ) - % $ 1,303 5 %
Cost of services(2) 12,456 34 21,931 48 24,978 49
Total cost of revenues(3) $ 12,714 24 % $ 21,893 36 % $ 26,281 34 %
(1) Percentage is calculated based on total software license revenues for the period indicated.
(2) Percentage is calculated based on total services revenues for the period indicated.
(3) Percentage is calculated based on total revenues for the period indicated.
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Cost of software licenses for the year ended December 31, 2006, increased $0.3 million, or over 100%, on a year-over-year basis. This increase is primarily a result of increased license revenues.
Credit for software licenses for the year ended December 31, 2005, decreased $1.3 million, or over 100%, on a year-over-year basis. This decrease is primarily a result of decreased license revenues, a decreased proportion of license revenues generated from royalty-bearing products and certain credits related to accruals determined to no longer be necessary.
Cost of services for the year ended December 31, 2006 decreased $9.5 million, or 43%, on a year-over-year basis. This decrease was the result of the reduction in consulting headcount, the consolidation of our facilities, and less services revenue.
Cost of services for the year ended December 31, 2005 decreased $3.0 million, or 12%, on a year-over-year basis. This decrease was the result of the reduction in consulting headcount and third-party consultant costs that occurred during the 2005 fiscal year. The decrease as a percent of services revenue is due to certain staffing efficiencies gained during the year.
The number of total consulting employees was 27 as of December 31, 2006, 50 as of December 31, 2005, and 77 as of December 31, 2004.
Operating Expenses
Operating expenses consist of the following:
l Research and development expenses consist primarily of salaries, employee-related benefit costs and consulting fees incurred in association with the development of our products. Costs incurred for the research and development of new software products are expensed as incurred until such time that technological feasibility, in the form of a working model, is established at which time such costs are capitalized and recorded at the lower of unamortized cost or net realizable value. The costs incurred subsequent to the establishment of a working model but prior to general release of the product have not been significant. To date, we have not capitalized any costs related to the development of software for external use.
l Sales and marketing expenses consist primarily of salaries, employee-related benefit costs, commissions and other incentive compensation, travel and entertainment and marketing program-related expenditures such as collateral materials, trade shows, public relations, advertising and creative services.
l General and administrative expenses consist primarily of salaries, employee-related benefit costs, provisions and credits related to uncollectible accounts receivable and professional service fees.
l Goodwill and intangible write-offs and amortization represents costs to write-off or amortize goodwill and other intangible assets. As of January 1, 2002, we no longer amortize goodwill or the assembled workforce as we have identified the assembled workforce as an intangible asset that does not meet the criteria of a recognizable intangible asset as defined by SFAS 142.
l Restructuring (reversals) charges represent costs incurred to restructure our operations. These charges, including charges for excess facilities, severance and certain non-cash items, were recorded under the provisions of EITF 94-3, and SFAS 146.
l Business combination charges represent costs incurred in connection with merger or acquisition activity.
A summary of operating expenses is set forth in the following table (dollars in thousands, percentages are based on total revenues):
Years Ended December 31,
2006 % 2005 % 2004 %
Research and development $ 10,510 20 % $ 13,831 23 % $ 18,024 23 %
Sales and marketing 8,653 17 16,208 27 27,340 35
General and administrative 8,019 15 9,479 16 9,538 12
Goodwill impairment - - 31,368 52 - -
Restructuring (credits), net (3,369 ) (6 ) (462 ) (1 ) (23,545 ) (30 )
Business combination charges - - 2,817 5 - -
Total operating expenses $ 23,813 46 % $ 73,241 122 % $ 31,357 40 %
Research and development. Research and development expenses decreased $3.3 million, or 24% in 2006 compared to 2005 and $4.2 million, or 23%, in 2005 compared to 2004. Each decrease was primarily attributable to reductions in staffing levels resulting in decreased salary and salary related costs, as well as other cost-cutting efforts taken as part of our restructuring plan, such as the consolidation of facilities.
Sales and marketing. Sales and marketing expenses decreased $7.6 million, or 47% in 2006 compared to 2005 and decreased $11.1 million, or 41% in 2005 compared to 2004. These decreases are primarily due to decreased salary expense as a result of reductions in force, decreased variable compensation due to lower revenues, and decreased facility, travel and marketing program costs as a result of various cost-cutting actions.
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General and administrative. General and administrative expenses decreased $1.5 million, or 15% in 2006 compared to 2005, due to a $1.5 million decrease in labor-related expenses and a receipt of a $700,000 (net of expense) property tax refund in 2006, offset by $860,000 in additional accounting fees. Net general and administrative expenses decreased less than 1% in 2005 as compared to 2004. Costs as a percentage of revenue increased in 2005 due to continued Sarbanes-Oxley compliance costs and a significant number of SEC filings. The decreases in 2005 was primarily attributable to decreases in salary expenses as a result of reductions in force, professional services expenses as a result of cost cutting measures, reserves of accounts receivable due to better than expected collection efforts and declining accounts receivable balances, and continued facilities consolidations.
Goodwill impairment and amortization. On April 14, 2000, we acquired all of the outstanding common stock of Interleaf, Inc. in a transaction accounted for as a purchase business combination. As a result of this transaction, we recorded goodwill and other intangible assets of $794.7 million. Amortization of recognizable intangible assets related to the Interleaf transaction was $3.5 million in 2002. In the third quarter of 2005, we determined that an impairment of the goodwill had occurred, and therefore we recorded a write-off of $13.2 million as an estimated impairment amount. In the fourth quarter of 2005, we recorded an additional charge of $18.2 million related to a revision of that estimate. Since the fair value of these assets as of December 31, 2006 was determined to be greater than book value, we determined that no additional impairment or amortization was necessary in 2006.
Restructuring credit, net During 2006 we recorded a restructuring credit of $3.4 million primarily due to a $4.5 million accrual reversal related to the buy-out option of a new space that we decided not to exercise. In addition, we have sub-leased out excess facility space. In fiscal 2005, we recorded a restructuring credit of $462,000, primarily due to an additional sublease entered into for a portion of our headquarters facility. In fiscal 2004, we reached agreement with several landlords to extinguish approximately $155.0 million of obligations related to excess facility leases, which contributed to a pre-tax net restructuring credit during the year of $23.5 million. During each period, we recorded an amount in the low-end of a range of assumptions modeled for the restructuring charges, in accordance with SFAS No. 5, Accounting for Contingencies. Adjustments to the restructuring reserves will be made in future periods, if necessary, based upon the then current actual events and circumstances.
The following table summarizes the restructuring accrual activity recorded during the three-years ended December 31, 2006 (in thousands):
Severance
and Facilities/Excess
Benefits Assets Total
Accrual balances, December 31, 2003 $ 671 $ 104,709 $ 105,380
Restructuring charges (credits) 1,114 (24,659 ) (23,545 )
Cash payments (961 ) (46,711 ) (47,672 )
Accrual balances, December 31, 2004 824 33,339 34,163
Restructuring charges (credits) 1,006 (1,468 ) (462 )
Cash payments (1,414 ) (25,032 ) (26,446 )
Accrual balances, December 31, 2005 416 6,839 7,255
Restructuring charges (credits) 348 (3,717 ) (3,369 )
Cash payments (417 ) (907 ) (1,324 )
Accrual balances, December 31, 2006 $ 347 $ 2,215 $ 2,562
Business combination charges . We recorded business combination charges of $2.8 million in the year ended December 31, 2005, related to the termination of our merger agreement with a wholly owned subsidiary of Vector Capital Corporation.
Other Income (Expense), net
Other income (expense), net, consists of the following (dollars in thousands, percentages are based upon total revenues) for the indicated periods:
Years Ended December 31,
2006 % 2005 % 2004 %
Interest income (expense), net $ 638 1 % $ (10,094 ) (17 )% $ (629 ) (1 )%
Income (expense) from derivatives (1,333 ) (3 ) 11,346 19 (2,421 ) (3 )
Loss on debt extinguishment - - (6,967 ) (12 ) - -
Other (expense) income, net 888 2 (849 ) (1 ) 941 1
Total other income (expense), net $ 193 $ (6,564 ) $ (2,109 )
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Net interest income (expense) includes interest income on invested funds, less interest on the face amount of the Notes and on bank debt and the amortization of the discount on the Notes. In 2006, we generated $638,000 net interest income due to positive cash from operating activities and cash received from the rights offering. Net interest expense decreased by $10.7 million in 2006 as compared to 2005 due to the pay-off the convertible debt. Net (expense) interest increased by $9.5 million in 2005 as compared to 2004 due to the following factors: 1) we issued the Notes in November 2004 that were outstanding for the majority of fiscal year 2005, significantly increasing the amount of interest expense for the year, and 2) we recorded a $2.6 million charge related to the 20% premium agreed to during the fourth quarter and the resulting revaluation of the Notes.
Expense from derivatives in 2006 was from the revaluation of the warrants issued in connection with the Notes and the real estate buyout. Income from derivatives in 2005 included $4.6 million from the revaluation of the warrants issued in connection with the Notes and the real estate buyout and $6.7 million from the revaluation of the embedded derivatives related to the Notes. Expense from derivatives in 2004 included $0.7 million from the revaluation of the warrants issued in connection with the Notes and the real estate buyout and $1.7 million from the revaluation of the embedded derivatives related to the Notes.
Loss on debt extinguishment of $7.0 million in 2005 was recorded upon the agreement to exchange the Notes for common stock and the presumed cancellation and reissuance of the Notes at the fair value of the underlying shares to be exchanged. On the agreement date, the carrying value included Note face value of $15.4 million less discount of $1.9 million. The value of the underlying shares was $20.7 million less accrued interest of $165,000.
Net other (expense) income increased from expense of $849,000 in 2005 to income of $888,000 in 2006. The change is mainly due to reversal of $850,000 accrued liabilities that we are no longer subject to.
Income Taxes
We recorded income tax provisions (benefits) of $634,000, ($2.6 million), and ($309,000) for the years ended December 31, 2006, 2005 and 2004, respectively. For the year ended December 31, 2006, the tax provision mainly relates to foreign and federal income taxes. The tax benefit from fiscal 2005 was primarily due to tax accruals determined to be no longer required. For the year ended December 31, 2004, the tax benefit relates primarily to the income tax accruals decreasing during the fiscal year. Partially offsetting the reduction in accruals were tax provisions related to foreign withholding taxes and state income taxes.
Liquidity and Capital Resources
Background and Overview
During the previous years through December 31, 2005, we faced various liquidity challenges. During the year ended December 31, 2006, the following significant events occurred: approximately $20.5 million in convertible debt was exchanged for 34.5 million shares of common stock; we generated cash flow from operations of approximately $16.0 million; and we closed our rights offering and raised net proceeds of approximately $15.8 million. At December 31, 2006, our current assets exceeded our current liabilities by approximately $19 million. Our management believes that cash resources at December 31, 2006 will be sufficient to fund operations through at least December 31, 2007. If our existing cash resources are not sufficient to meet its obligations, we will seek to raise additional capital through public or private equity financing or from other sources. If adequate funds are not available or are not available on acceptable terms as needed, we may be unable to pay our debts as they become due, develop our products, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements.
Our consolidated balance sheet strengthened considerably throughout 2006. As of December 31, 2006, we had $37.0 million of cash, with no long-term debt borrowings. This represents a 671% increase from the prior year's starting cash position of $4.8 million. Positive cash flow from business operations and rights offering each contributed approximately half of the $32.2 million cash generated during 2006.
2006 full-year revenues of $52.0 million were down 13% from 2005 revenues of $60.1 million, due primarily to declines in consulting revenues mentioned above, which were down 37%. Maintenance revenues were down 6%; license revenues up a modest 4%. The most significant change was the year-over-year decline in consulting revenues, which can be attributable to a lagging effect caused by declining license revenues in prior quarters. Since consulting projects tend to trail licenses by 6 to 12 months, as our licenses went down during the turbulent 2005, its lagging effect finally caught up with us in the second half of 2006. However, on a more positive note, this decline was more than offset by corresponding cost savings in both direct headcount and contractor expenses. As a result, consulting services actually generated fairly decent positive margins compared to many prior higher-revenue quarters.
We were vigilant about our expense control throughout 2006, with a sharp focus on achieving strong operating results and profit margins. 2006 full-year expenses were $37.0 million, as compared to 2005 equivalents of $99.1 million. As a result, 2006 net income were $15.0 million, or $0.23 per share. This compares to 2005 net losses of $39.0 million, or $(1.14) per share.
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The following table represents our liquidity at December 31, 2006 and 2005 (dollars in thousands):
December 31,
2006 2005
Cash and cash equivalents $ 37,003 $ 4,849
Restricted cash, current portion $ 997 $ -
Restricted cash, net of current portion $ 1,000 $ 1,997
Working capital (deficit) $ 18,955 $ (35,872 )
Working capital ratio 1.63 (0.35 )
Cash Provided By (Used For) Operating Activities
Cash flow from operating activities was $16.0 million for fiscal 2006. Cash used for operating activities was $37.9 million and $41.9 million for fiscal years 2005, and 2004, respectively. Net cash provided by operating activities in 2006 was primarily due to the $12.3 million profit (excluding restructuring credit) generated from sales margin improvement and our company-wide cost reduction efforts. In addition, we recognized a $3.4 million restructuring credit resulting from our effort of subleasing the excess facilities. Also impacting cash flows from operations in fiscal 2006 was an additional $5.3 million in collection of accounts receivable and unearned revenue and deferred maintenance, partially offset by a decrease in accounts payable and accrued expenses of $4.3 million.
Net cash used in operating activities in 2005 was primarily due to $25.0 million of lease and buyout payments associated with long-term lease obligations from agreements signed during fiscal 2004. Also impacting cash flows from operations in fiscal 2005 was a $2.0 million reversal of income tax accruals, a decrease in accounts payable and accrued expenses of $7.0 million, a decrease in the restructuring accrual of $26.9 million (mostly related to the settlement of long-term lease obligations), a decrease in unearned revenue and deferred maintenance of $3.9 million and a gain of $11.3 million on revaluation of embedded derivatives related to the Notes and the related warrants, partially offset by $9.4 million of amortization of discount and revaluation of the Notes, a loss on debt extinguishment of $7.0 million and a decrease in accounts receivable of $2.4 million.
Net cash used for operating activities of $41.9 million in 2004 was largely due to buyout payments to settle long-term lease obligations. As a result of the settlement of future lease obligations during the third and fourth quarters of fiscal 2004, we paid $20.7 million in cash to extinguish future lease obligations. Also impacting cash flows from operations in fiscal 2004 was a net loss of $6.3 million (before restructuring credits related to real estate transactions), a $1.5 million release of doubtful accounts and reserves and a $7.0 million decline in unearned revenue and deferred maintenance. There were also several non-cash items, including non-cash depreciation and amortization expense of $3.7 million, a non-cash restructuring reversal of $24.9 million, non-cash losses of $2.4 million from the revaluation of the conversion feature of the Notes and the related warrants, non-cash discount amortization related to the Notes of $401,000 and changes to balance sheet accounts, including a decrease in accounts receivable, prepaid expenses and other current assets of $5.0 million and a decrease in accounts payable and accrued expenses of $2.2 million.
Cash Provided By (Used For) Investing Activities
Cash provided by investing activities in fiscal 2006 was $180,000, primarily as a result of sales of cost method investment of $426,000 and offset by capital expenditures of $246,000. Cash provided by investing activities in fiscal 2005 was $23.8 million, primarily as a result of transfers from restricted cash and proceeds from dividends received related to equity investments. Cash used for investing activities in fiscal 2004 was $3.8 million, primarily as a result of transfers to restricted cash.
Capital expenditures were $246,000 for fiscal 2006, $142,000 for fiscal 2005, and $730,000 for fiscal 2004. Our capital expenditures have consisted of purchases of operating resources to manage our operations and included computer hardware and software, office furniture and fixtures and leasehold improvements.
Cash Provided By (Used For) Financing Activities
Cash provided by financing activities was $15.9 million in fiscal 2006. In November 2006, we closed the rights offering, which provided $15.8 million in net proceeds after issuance costs. Cash used for financing activities in fiscal 2005 was $23.2 million, primarily due to the repayment of borrowings under our bank line of credit and Notes payments. Cash provided by financing activities was $8.9 million in fiscal 2004. In November 2004, we issued the Notes and a related warrant to five institutional investors, which provided $14.9 million in net proceeds after issuance costs. Offsetting this in fiscal 2004 was a $7.0 million reduction in bank borrowings and bank term debt principal payments of $900,000.
Leases and Other Contractual Obligations
We lease our headquarters and other facilities under non-cancelable operating lease agreements expiring 2012. Under the terms of the agreements, we are required to pay lease costs, property taxes, insurance, and normal maintenance costs.
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We expect to incur significant operating expenses for the foreseeable future in order to execute our business plan. A summary of total future minimum lease payments as of December 31, 2006, under non-cancelable operating lease agreements is as follows (in millions):
Operating
Leases
Years Ending December 31,
2007 $ 2.7
2008 1.7
2009 1.7
2010 1.2
2011 and thereafter 1.7
Total minimum lease payments $ 9.0
As of December 31, 2006, we have accrued $2.2 million of estimated future facilities costs as a restructuring accrual. This accrual includes the above minimum lease payments that are related to excess and abandoned space under lease and certain lease related allowances, fees and expenses, partially offset by estimated future sublease income (See Note 8 in the Notes to Consolidated Financial Statements).
Factors That May Affect Future Liquidity
The following table summarizes our contractual obligations as of December 31, 2006 and the effect such obligations are expected to have on our liquidity and cash flows in future years. Restricted cash represents the collateral for our letters of credit.
Less Than 1-3 4-5 Over
Total 1 Year Years Years 5 Years
(In millions)
Letters of credit $ 2.0 $ 1.0 $ - $ - $ 1.0
Non-cancelable operating leases 2.2 0.9 1.1 0.2 -
$ 4.2 $ 1.9 $ 1.1 $ 0.2 $ 1.0
We anticipate that future operating expenses and cash payments under operating leases will constitute a material use of our existing cash resources. As a result, our net cash flows will depend heavily on the level of future revenues, and our ability to manage infrastructure costs.
Quarterly Results of Operations
The following tables set forth certain unaudited condensed consolidated statement of operations data for the eight quarters ended December 31, 2006, as well as that data expressed as a percentage of our total revenues for the periods indicated.
This data has been derived from unaudited condensed consolidated financial statements that, in the opinion of management, include all adjustments consisting only of normal recurring adjustments, necessary for a fair presentation of such information when read in conjunction with the Consolidated Financial Statements and Notes thereto.
The unaudited quarterly information should be read in conjunction with the Consolidated Financial Statements and Notes thereto included in this Form 10-K. We believe that period-to-period comparisons of our financial results are not necessarily meaningful and should not be relied upon as an indication of future performance.
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Three Months Ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006 2005 2005 2005 2005
(In thousands)
(Unaudited)
Statement of Operations Data:
Revenues:
Software licenses $ 3,956 $ 4,750 $ 3,627 $ 2,882 $ 3,780 $ 3,134 $ 3,391 $ 4,416
Services 9,090 8,835 9,102 9,742 10,383 10,943 12,123 11,951
Total revenues 13,046 13,585 12,729 12,624 14,163 14,077 15,514 16,367
Cost of revenues:
Cost of (credit for) software licenses 32 22 142 62 99 106 (186 ) (57 )
Cost of services 2,173 2,729 3,496 4,058 4,696 5,641 5,614 5,980
Total cost of revenues 2,205 2,751 3,638 4,120 4,795 5,747 5,428 5,923
Gross profit 10,841 10,834 9,091 8,504 9,368 8,330 10,086 10,444
Operating expenses:
Research and development 2,708 2,766 2,405 2,631 2,494 3,095 3,955 4,287
Sales and marketing 2,529 1,761 1,982 2,381 2,389 2,948 5,060 5,811
General and administrative 613 2,429 3,239 1,738 1,953 2,162 2,829 2,535
Goodwill impairment - - - - 18,170 13,198 - -
Restructuring (credits), charges (1,966 ) (1,878 ) (15 ) 490 (312 ) 245 309 (704 )
Business combination charges - - - - 1,840 977 - -
Total operating expenses 3,884 5,078 7,611 7,240 26,534 22,625 12,153 11,929
Operating income (loss) 6,957 5,756 1,480 1,264 (17,166 ) (14,295 ) (2,067 ) (1,485 )
Other income (expense), net 248 (163 ) 335 (227 ) (10,714 ) (1,757 ) (959 ) 6,866
Income taxes (expense) benefit (185 ) (228 ) (65 ) (156 ) 109 540 (70 ) 2,032
Net income (loss) $ 7,020 $ 5,365 $ 1,750 $ 881 $ (27,771 ) $ (15,512 ) $ (3,096 ) $ 7,413
Basic net income (loss) per share $ 0.09 $ 0.08 $ 0.03 $ 0.02 $ (0.81 ) $ (0.45 ) $ (0.09 ) $ 0.22
Diluted net income (loss) per share $ 0.09 $ 0.08 $ 0.03 $ 0.02 $ (0.81 ) $ (0.45 ) $ (0.09 ) $ 0.19
Shares used in computing basic net income (loss) per share 80,878 69,489 69,151 42,958 34,430 34,320 34,181 33,971
Shares used in computing diluted net income (loss) per share 80,878 69,489 69,151 43,068 34,430 34,320 34,181 39,968
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As a Percent of Revenue
Three Months Ended
Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006 2005 2005 2005 2005
(In thousands)
(Umaudited)
Statement of Operations Data:
Revenues:
Software licenses 30 % 35 % 28 % 23 % 27 % 22 % 22 % 27 %
Services 70 65 72 77 73 78 78 73
Total revenues 100 100 100 100 100 100 100 100
Cost of revenues:
Cost of (credit for) software licenses - - 1 - 1 1 (1 ) (1 )
Cost of services 17 20 27 32 33 40 36 37
Total cost of revenues 17 20 28 32 34 41 35 36
Gross profit 83 80 72 68 66 59 65 64
Operating expenses:
Research and development 21 20 19 21 18 22 25 26
Sales and marketing 19 13 16 19 17 21 33 36
General and administrative 5 18 25 14 14 15 18 15
Goodwill impairment - - - - 128 94 - -
Restructuring (credits), charges (15 ) (14 ) - 4 (2 ) 2 2 (4 )
Business combination charges - - - - 13 7 - -
Total operating expenses 30 37 60 58 188 161 78 73
Operating income (loss) 53 43 12 10 (122 ) (102 ) (13 ) (9 )
Other income (expense), net - (3 ) 2 (3 ) (75 ) (8 ) (7 ) 54
Net income (loss) 53 % 40 % 14 % 7 % (197 )% (110 )% (20 )% 45 %
Our quarterly operating results have fluctuated in the past and may fluctuate significantly in the future as a result of a variety of factors, many of which are outside of our control. It is likely that our operating results in one or more future quarters may be below the expectations of securities analysts and investors. In that event, the trading price of our common stock almost
