Iona swings from profit to loss

24 Jan 2008

Irish enterprise middleware company Iona Technologies reported a pre-tax loss of US$1.7m for the financial year 2007, compared with a profit of US$3.6m the previous year, due to share compensation and other expenses.

The NASDAQ-listed company’s revenue declined only marginally to US$77.7m in 2007 from US$77.8m a year earlier.

Losses were driven by compensation expenses of US$4.7m, amortisation of intangible assets of US$700,000 and a deferred tax benefit of US$1.9m. Without these expenses Iona says it would have been able to report a profit of US$3.9m.

CEO Peter Zotto said, “Intense reviews of bigger deals toward the end of the year resulted in delays with specific customers at quarter-end, impacting our overall results and Artix, in particular.”

Iona’s traditional CORBA business remained predictable and profitable, he said.

“Our two acquisitions, C24 and LogicBlaze, have performed well while adding two new lines of business and diversifying our revenue base,” Zotto explained.

“We expect the new products will provide growth in two attractive market segments and will complement our existing Artix product line.”

Despite the losses, Iona’s chief financial officer Christopher Mirabile said the company is going into 2008 with a solid financial base.

“Iona generated US$11.7m of cash from operations in 2007,” he said. “Our two acquisitions are on track to be accretive in 2008.

“To protect our profitability and achieve our target operating margin, we have taken action to reduce our projected annualised expenses by approximately US$8m,” Mirabile added.

By John Kennedy