Imperva freezes sale talks

Shlomo Kramer  photo: PR
Shlomo Kramer photo: PR

The company reported 8% revenue growth and a streamlining plan to tackle growing losses.

Imperva Inc. (NYSE: ), which provides corporate information security solutions, reported its third quarter results over the weekend and announced it was freezing plans to sell the company. The California-based company, which has offices in Tel Aviv and Rehovot, reported $68.4 million revenue, 8% up from the corresponding quarter in 2015. The average analysts' forecast was $63 million. The GAAP-based operating loss was $11.8 million, compared with a $5.3 million loss in the corresponding quarter. It reported $2.5 million non-GAAP net profit, $0.08 per share, 40.3% down from the corresponding quarter. The figure was stronger than the analysts' forecast, which predicted a $0.16 loss per share. The company's GAAP-based loss in the third quarter was $11.7 million, $0.36 per share, compared with a $5.7 million loss in the corresponding quarter.

In a summary of the first nine months of 2016, the company reported a $186 million revenue, 15% up from the corresponding period in 2015. Net loss increased to $60.5 million, compared with $43.1 million in the corresponding period. At the end of the quarter, the company had $259 million in cash.

Imperva's market cap is $1.1 billion, after plummeting 50% in the past year. The company made its Wall Street IPO in late 2011, when it raised $90 million, at a price of $18 per share and a market cap of almost $400 million. At the end of 2015, the share was traded at a record price that reflected a $2.4 billion market cap for the company.

The plan: cutting $15 million expenses

Imperva's management estimates that in the current quarter, it will have a $0.01-0.04 non-GAAP profit per share and $69-71 million revenue. The company's forecast for the entire year predicts $255-257 million revenue and $11.3-12.4 loss, $0.35-0.38 per share.

At the same time, the company's management also announced a streamlining plan in which manpower, as well as other expenses, will be cut. Streamlining is expected to save $15 million annual expenses, and is to be completed by the end of the year. According to company figures, at the end of 2015 it had 923 employees, about 45% in the US, 44% in Israel and the rest in other countries.

Imperva was founded by Shlomo Kramer and is currently managed by CEO Anthony Bettencourt. In the past few months, it conducted talks for its sale. This option was put on the table after the activist hedge fund Elliott Associates invested in the company in June 2016. About three months ago, "Bloomberg" reported that the funds Silver Lake Management and Thoma Bravo were planning on making offers to buy Imperva. In the past, "Bloomberg" had already reported that Cisco and IBM were interested in buying; the most recent report says that they are still in the picture. Later on, "Bloomberg" reported that talks were put 'on ice'; Bettencourt confirmed the report in a conference call that followed the publication of results. "The company's board has decided that at this stage the best way of increasing the value for shareholders will be for the company to continue independently," Bettencourt said.

Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Shlomo Kramer  photo: PR
Shlomo Kramer photo: PR
Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018