Honey I Shrunk The Company, II: Convera's 4Q08 Results

Convera reported its 4Q08 and 2008 fiscal results (for the period ending 1/31/08). Highlights:
  • 4Q08 revenues of $0.28M
  • 4Q08 net loss of $7.0M
  • 2008 revenues of $1.1M
  • 2008 operating loss of $27.0M
  • 2008 net loss of $9.0M (net of a $17.9M gain on sales of discontinued operations)

Cash and equivalents of $36.6M on 1/31/08, down from $47.5M on 1/31/07, amounting to an $11M burn over the year, including $18.1M of cash they received from the sale of RetrievalWare — or, if I did the math correctly since they didn’t present a statement of cashflows — a pre-sale $29M burn rate on the year, roughing out to a cash burn rate of about $7.5M/quarter. That translates to 4.8 “quarters of cash” — i.e., how long your cash lasts on your current burn rate.

So in the next few quarters, the new strategy better start generating more revenue, or they’ll need to cut expenses or raise (yet) more cash.

The good news in here (and you have to look hard to find it) is growth. 4Q08 revenues were up 139% compared to $117K in 4Q07, and 2008 revenues were up 316% compared to $269K in 2007. It’s nice growth, but it’s off a minuscule base.

The bad news on growth is the 139% instantaneous growth rate (i.e., 4Q to 4Q) is lower than the 316% average one (i.e., 2008 over 2007) suggesting they’re experiencing deceleration. Were they gaining momentum, the instantaneous growth rate would be higher than the average one.

See my original Honey, I Shrunk The Company post here.

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