Onyx Eyes Profitability and Looks for a New CEO

Onyx Software today announced preliminary results for the fourth quarter of 2003, and says it is on track to be profitable in 2004. Onyx also announced that the CRM provider would be looking for a new CEO, as current chief Brent Frei says he plans to step down. The company expects revenue for the fourth quarter of 2003 in the range of $13 million and an operating loss in the range of $1.3 million. Non-GAAP operating loss excludes adjustments for amortization of intangibles, stock compensation expense, and any adjustments for restructuring. Onyx expects to announce final results for the fourth quarter of 2003 in the first week of February. License revenue for the quarter is expected to be in the range of $2.7 million. According to Frei, the lower-than-expected number is due to the fact that many CRM deals are still on the table and will not be closed until this quarter. Frei adds that a good quarter from Onyx Japan will aid the profitability push. Service revenue for the fourth quarter of 2003 is expected to be in the range of $10.3 million, reflecting lower-than-anticipated consulting revenues, but maintenance revenues remained strong, which is consistent with the company's expectation. The company experienced unplanned gaps in professional services redeployment following completion of major projects ahead of schedule and before new-project initiations. Onyx continues to have tight cost controls in effect. According to Brian Henry, executive vice president and CFO of Onyx, the company expects sequential-quarter improvement in both license and service revenues in the first quarter of 2004 and to achieve a non-GAAP operating profit in the first quarter. End-of-year cash position is expected to be in the range of $11.8 million, down only modestly from $12 million at the end of the third quarter, despite $1.6 million in fourth-quarter cash payments to reduce restructuring liabilities. The minimal net use of cash reflects strong collections following solid third-quarter performance, according to the company. Separately Onyx announced that the board of directors, including Frei, has begun a search for a new CEO and has retained a nationally recognized, professional recruiting firm. Frei will remain the CEO until his successor is on board. "I'm proud of the technology leadership and customer-focused corporate culture we've created, and I believe that the time is right for me to turn over the reins to a CEO who can take Onyx to new heights over the next decade," Frei said in a statement.
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