InfoVista Announces Financial Results for Second Quarter

PARIS--(BUSINESS WIRE)--InfoVista (Euronext: IFV)(ISIN: FR0004031649):

• 38% YoY Software product revenue growth
• Operating income doubled compared to last year

InfoVista (Euronext: IFV)(ISIN: FR0004031649), global leader of service performance assurance, today announced financial results for its second quarter, ended December 31, 2010.

Total revenues for the quarter were €12 million, compared to €10.7 million in the second quarter last year. Operating income was €1.1 million or 10% for the quarter, compared to €0.6 million or 5% a year ago. Net income reached €0.9 million for the quarter as compared to €0.5 million last year.

“We are on the right track. Not only do we show this quarter a strong growth in license sales but we also demonstrate the profitability of our business model with a remarkable jump in our operating income” said Philippe Ozanian, InfoVista’s CEO. “These results confirm the relevance of our solutions and a sound execution. With a solid performance achieved in the first half of our fiscal year we are well positioned to achieve the goals we set ourselves for this year both in terms of total revenues and operating margin”

Revenues by Region

In thousands	Q2 FY11	Q2 FY10	% Change	H1 FY11	H1 FY10	% Change
EMEA	€7,215	€5,851	23%	€12,797	€11,623	10%
Americas	3,521	2,642	33%	7,333	5,240	40%
Asia-Pacific	1,224	2,158	-43%	2,714	3,366	-19%
Total	€11,960	€10,651	12%	€22,844	€20,229	13%

• In the second quarter, EMEA benefited from a good mixture of emerging market revenues and large repeat orders from service provider customers in mature countries. A large deal with the US government along with orders from LATAM service providers enhanced Americas’ revenues for the second quarter. Asia-Pacific total revenues decreased as compared to an exceptional professional services revenue recorded a year ago, coupled with a revenue recognition delay of a €0.5 million software order.
• In the second quarter, InfoVista derived 36% of total revenues from its indirect sales channel. The service provider market generated 69% of total revenues for the quarter.

Operating Expenses

In thousands	Q2	%	Q2	%	H1	%	H1	%
	FY11	revenues	FY10	revenues	FY11	revenues	FY10	revenues
Sales & Marketing	€4,280	36%	€3,707	35%	€8,318	36%	€7,138	35%
Research & Development	2,382	20%	2,406	23%	4,716	21%	4,711	23%
General & Administrative	1,435	12%	1,407	13%	2,747	12%	2,718	13%
Total	€8,097		€7,520		€15,781		€14,567

• Sales & marketing costs increased from higher personnel costs linked to software revenue growth. Research & development costs primarily decreased from higher R&D tax credits in France for the second quarter. General & administrative costs remained unchanged.
• As at December 31, 2010, InfoVista had 231 employees.

Balance Sheet

• Days Sales Outstanding (DSO) stood at 79 days for the second quarter, as compared to 78 days in the comparable quarter last year.
• As at December 31, 2010, the Company’s cash, cash equivalents and short-term deposits amounted to €25.7 million, as compared to €25.8 million as at June 30, 2010 and €24.9 million as at September 30, 2010. For the quarter, €0.8 million of cash was generated mainly from operating activities.
• As at December 31, 2010, InfoVista had a total of 17,711,804 and 16,530,661 shares issued and outstanding, respectively. On December 15, 2010, the Board of Directors cancelled 340,000 shares in treasury, representing 2% of the issued capital.

Conference call

InfoVista will host an investor conference call on January 27, 2011 at 9.00 a.m. (EST) / 2:00 p.m. (UK) / 3:00 p.m. (Continental Europe). The call will be available by dialing France [phone] North America [phone] and [phone] in the UK. In each case, the access code is 9469935. A replay will be available shortly after the end of the call at the following numbers: France: [phone] UK: [phone] North America: [phone] – all with access code 9469935#.

About InfoVista

InfoVista enables managed service providers, mobile operators, broadband operators and enterprise IT organizations to ensure the availability and quality of the services they deliver at the lowest possible cost, empowering these organizations to successfully make the transformation from infrastructure providers to service providers. Our customers rely on InfoVista’s proven solutions for service and infrastructure performance management to successfully launch new and high performance services, foresee potential service issues before they impact end users, reduce customer churn, and invest appropriately. Sample customers include Bell Canada, Bharti, BNP Paribas, Cable & Wireless, Citigroup, Deutsche Telekom, KPN International, Microsoft, SFR, SingTel, T-Mobile, Telefonica, Telstra, and Wells Fargo. InfoVista is traded on the Euronext Paris (FR0004031649) and can be found online at www.infovista.com.

Except for historical information contained herein, the matters discussed in this news release are "forward looking statements." These statements involve risks and uncertainties which could cause actual results to differ materially from those in such forward-looking statements; including, without limitation, risks and uncertainties arising from the rapid evolution of our markets, competition, market acceptance of our products, our dependence upon spending by the telecommunications industry and our ability to develop and protect new technologies. For a description of other factors which might affect our actual results, please see the "Risk Factors" section and other disclosures in InfoVista's public filings with the French Autorité des Marchés Financiers. Readers of this news release are cautioned not to put undue reliance on any forward-looking statement. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

INFOVISTA
CONSOLIDATED INCOME STATEMENTS
(In thousands, except for share and per share data)
The table presented below represents the consolidated income statements in accordance with IFRS
	For the six months ended		For the three months ended
	December 31,		December 31,
	2010	2009	2010	2009
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Revenues
Software products	€ 9,046	€ 6,709	€ 4,955	€ 3,588
Maintenance services	10,941	10,605	5,462	5,440
Professional services	2,857	2,915	1,543	1,623
Total	22,844	20,229	11,960	10,651
Cost of revenues
Cost of software products	918	500	562	338
Cost of services	4,328	4,245	2,043	2,120
Total	5,246	4,745	2,605	2,458
Gross profit	17,598	15,484	9,355	8,193
Operating expenses
Sales and marketing expenses	8,319	7,138	4,280	3,707
Research and development expenses	4,716	4,711	2,382	2,406
General and administrative expenses	2,747	2,718	1,435	1,407
Amortization of acquired intangible assets	229	229	114	114
Total	16,011	14,796	8,211	7,634
Operating profit	1,587	688	1,144	559
Financial revenues	90	113	51	55
Financial costs	(11)	(13)	(1)	(8)
Net foreign currency transaction losses	(236)	(97)	(141)	(87)
Net financial (loss) profit	(157)	3	(91)	(40)
Profit before income taxes	1,430	691	1,053	519
Income tax expense	(256)	(92)	(135)	(5)
Net profit	€ 1,174	€ 599	€ 918	€ 514
Basic profit per share	€ 0.07	€ 0.03	€ 0.06	€ 0.03
Diluted profit per share	€ 0.07	€ 0.03	€ 0.05	€ 0.03
Basic weighted average shares outstanding	16,507,196	17,238,559	16,501,750	17,089,818
Diluted weighted average shares outstanding	16,868,646	17,359,099	16,986,216	17,243,985

INFOVISTA
CONSOLIDATED BALANCE SHEETS
(In thousands)
The table presented below represents the consolidated balance sheets in accordance with IFRS
	As of
	December 31,	June 30,
	2010	2010
	(unaudited)
ASSETS
Goodwill	€ 9,268	€ 9,268
Other intangible assets, net	1,186	1,379
Tangible assets, net	1,189	1,202
Deferred tax asset	928	894
Other non-current assets	547	619
Total non-current assets	13,118	13,362
Accounts receivables, net	10,554	13,207
Other current assets	2,599	2,071
Financial assets - current	8,029	11,538
Cash and cash equivalents	17,683	14,215
Total current assets	38,865	41,031
Total assets	€ 51,983	€ 54,393
EQUITY
Issued capital	€ 9,564	€ 9,728
Share premiums and other reserves	31,725	30,962
Treasury shares	(3,754)	(4,164)
Total equity	37,535	36,525
LIABILITIES
Deferred revenues - non-current	1,390	262
Other non-current liabilities	241	270
Total non-current liabilities	1,631	532
Accounts payables	1,694	2,904
Accrued salaries and commissions	2,141	2,820
Accrued social security and payroll taxes	928	1,932
Deferred revenues - current	7,139	8,716
Other current liabilities	915	964
Total current liabilities	12,817	17,336
Total liabilities and equity	€ 51,983	€ 54,393