Motive Reports Unaudited Financial Results



    Shows 8% increase in revenue

    AUSTIN, TEXAS, November 7 /CNW/ - Motive, Inc. (OTC: MOTV), a leading
provider of service management software for broadband and mobile data
services, today filed with the Securities and Exchange Commission a Form 8-K
providing unaudited financial results for the three and nine months ended
September 30, 2007.

    For the three months ended September 30, 2007, total revenue rose by $1.2
million to $17.3 million, an increase of 8% from $16.1 million for the three
months ended September 30, 2006. The increase was primarily due to a $2.1
million increase in license fees revenue partially offset by decreases of
$300,000 in services revenue acquired as a result of the BroadJump
acquisition, and a $600,000 decrease in other services revenue.

    For the 2007 third quarter, the company reported a net loss of $13.5
million, or $(0.49) per share, compared with a net loss of $6.0 million, or
$(0.22) per share, for the same period a year ago. Included in the loss was a
charge for $8.0 million for settlement of the class action and derivative
lawsuits and related expenses. The company's per share loss prior to the
settlement charge was $(0.20) per share and the loss per share for the lawsuit
settlement was $(0.29) per share. As of September 30, 2007, the company had
cash and short-term investments of $25.7 million.

    "Core license fee business remains strong as we increased revenues
outside of North America consistent with our focus on expanding our European
and Asia/Pacific operations," said Alfred Mockett, chairman and chief
executive officer. "Excluding the charge related to the settlement of the
class action and derivative lawsuits, we have reduced operating expenses 13%
in the past nine months compared with last year," he added.

    Company headcount stood at 308 as of September 30, 2007 compared to 258
at September 30, 2006.

    For the nine months ended September 30, 2007, total revenue decreased by
approximately 2% to $46.5 million compared with $45.7 million in prior year
period. The decrease was due primarily to a $3.1 million decrease in services
revenue and a $1.2 million reduction in services revenue acquired as a result
of the Broadjump acquisition. These decreases were partially offset by a $3.5
million gain in license fee revenue for the period.

    For the nine month period, the company reported a net loss of $26.9
million, or $(0.98) per share, compared with a net loss of $18.9 million, or
$(0.71) per share in 2006.

    Update

    --  On July 30th, Motive announced it had dismissed Ernst and Young as
the company's accountants as of July 27th.

    --  On October 23rd, Motive announced the appointment of BDO Seidman, LLP
as the company's new independent auditor effective Oct. 17th.

    --  On November 5th, Motive announced that it has reached an agreement to
settle the securities class action litigation pending in U.S. District Court
in the Western District of Texas Additionally, the company has reached an
agreement in principle to settle the shareholder derivative litigation pending
in the same court.

    --  On November 6th, Motive announced it had hired Thomas Weisel partners
to review and evaluate the company's strategic options.

    Added Mr. Mockett, "As we've previously disclosed, over these past many
months we have taken significant steps to resolve many non-operational issues.
This past month we announced settlement of the class action and derivative
litigation and the hiring of BDO Seidman as our independent auditing firm.
Both these actions are important steps for Motive going forward."

    The Company had previously filed with the Securities and Exchange
Commission a Form 8-K providing unaudited financial statements for the years
ended December 31, 2005 and December 31, 2006, and interim financial
statements, unaudited, for the six months ended June 30, 2007. The unaudited
financial statements included restated annual financial results for 2003 and
2004, and restated financial results for the six months ended June 30, 2005.

    As previously announced, the company intends to file unaudited financial
statements each quarter under Form 8-K until it is able to file audited
financial statements.

    About Motive, Inc.

    Motive provides service management software for broadband and mobile data
services. Motive's software is helping wireline, wireless, cable and satellite
operators worldwide deliver a new generation of IP-based services that
seamlessly integrate voice, video and data into a single, connected
experience. With Motive, operators can leverage one service management
platform to automate and remotely manage key customer touch points throughout
the service lifecycle, across multiple services, networks and devices. The
result is a consistent, unified experience for both customers and service
providers that increases revenues from new and converged services, reduces
fulfillment and support costs, and drives greater customer satisfaction and
loyalty.

    Motive and the Motive logo are trademarks or registered trademarks of
Motive, Inc. All other products or services mentioned herein are trademarks of
their respective holders.

    Forward-Looking Statements

    This press release contains certain forward looking statements, within
the meaning of the federal securities laws, which are identified by the use of
the words "believes", "expects", "anticipates", "will", "contemplates",
"would", "should", "may", "estimate", "intend", "plan" and similar expressions
that contemplate future events. These forward-looking statements are subject
to risks and uncertainties that could cause our actual results or performance
to differ materially from that indicated in the forward-looking statements.
These risks and uncertainties include, but are not limited to, our ability to
timely complete the restatement of our historical financial results and timely
complete our financial statements for the years ended December 31, 2005 and
December 31, 2006 and for interim periods since December 31, 2006, the ability
of our new independent accounting firm to complete its audits and reviews of
our financial statements, our ability to complete and file our delinquent SEC
reports, the fact that our historical financial results are not finalized and
are subject to change, the outcome of an ongoing SEC investigation, the
outcome of pending securities and shareholder derivative litigation, and those
additional risk factors and uncertainties discussed in our filings with the
SEC, which are available at www.sec.gov. Statements included in this press
release are based upon information known to us as of the date of this press
release, and we assume no obligation to update any information contained in
this press release.

    
                                 MOTIVE, INC.
       CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED AND UNREVIEWED)
                   (in thousands, except per share amounts)

                                  Three Months Ended   Nine Months Ended
                                     September 30,       September 30,
                                  ------------------- --------------------
                                    2006      2007       2006      2007
                                  ------------------- --------------------
    Revenue:
    License fees                  $ 11,450 $  13,550  $  34,162 $  37,688
    Services:
        Services                     4,346     3,788     11,161     8,020
        Acquired in business
         combination                   281         -      1,214         -
                                  ------------------- --------------------
    Total services revenue           4,627     3,788     12,375     8,020
                                  ------------------- --------------------
    Total revenue                   16,077    17,338     46,537    45,708
                                  ------------------- --------------------
    Cost of revenue:
       License fees                    646       926      1,671     2,069
       Amortization of acquired
        technology                     550       550      1,650     1,650
       Services                      5,405     6,416     16,265    18,601
                                  ------------------- --------------------
    Total cost of revenue            6,601     7,892     19,586    22,320
                                  ------------------- --------------------

    Gross margin                     9,476     9,446     26,951    23,388

    Operating expenses:
       Sales & marketing             7,063     6,212     21,304    16,574
       Research & development        3,671     4,089     12,331    11,220
       General & Administrative      5,019     4,873     14,194    14,946
       Amortization of intangibles     138       137        413       412
       Shareholder and securities
        litigation settlements           -     8,000          -     8,000
       Business restructuring
        charge                           -         -      1,561         -
                                  ------------------- --------------------
    Total operating expenses        15,891    23,311     49,803    51,152
                                  ------------------- --------------------
    Loss form operations            (6,415)  (13,865)   (22,852)  (27,764)
    Interest income and expense,
     net                               499       285      1,505     1,114
    Other income (expense), net         12       137      2,697       (43)
                                  ------------------- --------------------
    Loss before income taxes        (5,904)  (13,443)   (18,650)  (26,693)
    Provision for income taxes         121        58        333       258
                                  ------------------- --------------------
    Net loss                       ($6,025) ($13,501)  ($18,983) ($26,951)
                                  ------------------- --------------------
    Basic and diluted loss per
     share                          ($0.22)   ($0.49)    ($0.71)   ($0.98)
                                  ------------------- --------------------
    Shares used in computing basic
     and diluted loss per share     26,859    27,639     26,806    27,610
                                  ------------------- --------------------
    

    
                                 MOTIVE, INC.
            CONSOLIDATED BALANCE SHEETS (UNAUDITED AND UNREVIEWED)
                   (in thousands, except per share amounts)

                                                December 31, September 31,
                                                    2006         2006
                                                ------------ -------------
    ASSETS
    Current Assets:
           Cash and cash equivalents                $ 17,475      $16,499
           Short-term investments                     24,099        9,175
           Accounts receivable, net                   10,696       11,239
           Prepaid expenses and other current
            assets                                     3,283        4,127
                                                ------------ -------------
               Total current assets                   55,553       41,040
                                                ------------ -------------
    Property and equipment, net                        4,916        4,068
    Goodwill                                          39,656       39,656
    Acquired technology, net                           2,292          642
    Other intangibles, net                             1,123          710
    Other assets                                       1,684        2,314
                                                ------------ -------------
               Total assets                         $105,224      $88,430
                                                ------------ -------------

    LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)
    Current Liabilities:
           Accounts payable                         $  5,433      $ 5,307
           Accrued liabilities                         7,631       18,791
           Deferred revenue                           39,223       40,959
           Financing obligation payable                    -          265
                                                ------------ -------------
    Total current liabilities                         52,287       65,322
    Deferred revenue                                  30,130       25,121
                                                ------------ -------------
    Total liabilities                                 82,417       90,443
                                                ------------ -------------
    Stockholders equity                               22,807       (2,013)
                                                ------------ -------------
    Total liabilities and stockholders equity
     (deficit)                                      $105,224      $88,430
                                                ------------ -------------
    




For further information:

For further information: For Investors: Motive, Inc. Mike Fitzpatrick,
512-531-1044 W 512-983-7065 M Mike.fitzpatrick@motive.com or For Media: The
Torrenzano Group Al Bellenchia, 212-681-1700 x 156 Managing Director
abellenchia@torrenzano.com

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