RESTRUCTURING costs of $1.5 million (€963,000) and fees of $500,000 relating to it being a potential takeover target contributed to a first-quarter pretax loss of $4.7 million at Iona Technologies.
Although analysts suggested that spending $500,000 on professional fees indicated an acquisition was likely, Iona's management did not provide any further details.
On February 20th last, Iona appointed Lehman Brothers to advise it on strategic alternatives "including, but not limited to" a sale or merger. This followed an announcement by Iona that it had received a preliminary expression of interest regarding a takeover.
Iona chief executive Peter Zotto said yesterday it would not make an announcement unless a deal was approved, it ended the strategic review, or it was otherwise required to do so under law. Despite the loss, he said he was pleased with the company's first-quarter performance, "despite a difficult economic environment".
Iona reiterated its guidance for the full year that revenue will be in the range of $80 - $85 million, with total expenses of $79 - $81 million. Revenues for the first quarter to the end of March were $16.4 million, a 6 per cent increase year-on-year, but down 9 per cent from the previous quarter.
Sales of Iona's newer Artix product were up 31 per cent, while the legacy Corba products declined 5 per cent, lower than the company expected.
Mr Zotto said speculation about a takeover had not caused customers to delay purchases. The only region where it was mentioned was in Europe and customers saw it as a positive "because if we are acquired it will probably be by a larger company".
Iona finished the quarter with cash and securities of $55 million. However, $18 million of this includes US student loan-backed securities which due to the current market turmoil are now illiquid.Iona has classified the investments as non-current and recorded a temporary impairment of $800,000.
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