Vignette Reports Fourth Quarter And Fiscal Year 2006 Financial Results

Vignette Corporation (NASDAQ: VIGN) today announced GAAP and non-GAAP net income increased 135% and 60% respectively during the fourth quarter of 2006 on total revenue of $52.6 million, which was up 3.4% from the fourth quarter of 2005. Vignette’s GAAP net income for the quarter was $6.8 million and diluted EPS was $0.23, versus $2.9 million and $0.10 in the same quarter of last year. On a non-GAAP basis, Vignette's net income for the quarter was $8.5 million and diluted EPS was $0.28, versus $5.3 million of net income and diluted EPS of $0.18 in the same quarter of last year.

For the year ended December 31, 2006, total revenue increased 3.6% from the prior year to $197.6 million.  On a GAAP basis, net income decreased 40% to $12.3 million as the 2005 full year results included a one-time gain of $15.3 million on the sale of equity investments.  As a result, GAAP EPS also declined year over year from $0.68 to $0.41 on a diluted basis. On a non-GAAP basis, income from operations increased 35% to $14.6 million and net income increased 59% to $21.9 million.  Non-GAAP diluted EPS was $0.73 versus $0.46 in the prior year.

Non-GAAP results exclude purchased in-process research and development, acquisition-related charges, stock option expense, amortization expense for certain intangible assets, and one-time charges and gains. One-time charges and gains generally relate to business restructuring, investment and fixed asset impairment. A reconciliation of net income calculated in accordance with GAAP and non-GAAP net income is provided in the tables immediately following the condensed consolidated balance sheets and a further description of non-GAAP adjustments can be found under the caption ‘Non-GAAP Financial Information' below.

During the quarter Vignette realized strong cash flow from operations of $11.7 million.  Under the share repurchase program announced on November 13, 2006, Vignette purchased 815,750 shares of Vignette stock on the open market during the quarter at an average price of $16.75.  In addition, during the quarter Vignette moved $11.7 million of cash and short term investments to liquid securities with maturities of more than one year.  The combination of cash provided by operations and the use of cash for investing and financing activities resulted in an $11 million reduction in cash and short term investments during the quarter to a new balance of $204 million.

“We are pleased with our continued progress,” said Mike Aviles, president and chief executive officer at Vignette. “We exceeded guidance for both GAAP and non-GAAP earnings per share, our solutions are earning industry-wide recognition, and we are attracting some of the best and brightest people in the industry.”

New Business

Vignette recognized orders from new and existing customers during the quarter including Adventist Health, AMVESCAP, AXA Banque, Australia and New Zealand Banking Group, Australia Unity Group Services, Avery Dennison Office Products Company, Bank Leumi Israel Ltd., Baystate Health, Driver and Vehicle Licensing Agency, Educational Testing System, Givaudan, ING, MBF Limited, McGraw Hill Companies, Mercedes-Benz USA, Mercer Human Resource Services, Nedbank Limited, Nuskin International, Petrobras Energia SA, Pioneer Electronics, Safeway Inc, SPX Corporation, and Standard Bank of South Africa.

Stock Repurchase Program

During the quarter, Vignette announced the repurchase of up to $75 million of its Common Stock over the next year.  Purchases will be made from time to time as market and business conditions warrant, in open market, negotiated or block transactions, in accordance with applicable laws, rules and regulations.  Vignette's financial strength and ability to generate cash, has well positioned the company to invest in its current business and pursue growth through acquisitions.

During the quarter, Vignette continued to receive recognition from industry analysts and media outlets for execution and vision in product development and implementation. In a research note published this quarter, Nucleus Research recognized the recent release of Vignette Web Content Management for helping simplify complicated processes with a cleaner interface, personalized platform approach and enhanced publishing capabilities. Vignette Portal was acknowledged by CMS Watch for its ease of implementation and installation. Vignette was also named one of EContent Magazine’s ‘100 Companies that Matter Most’ as an innovative provider of Next-Generation Web solutions.

Leo Brunnick Named SVP of Products and Marketing

Leo Brunnick has been named senior vice president of Products and Marketing at Vignette. Brunnick will oversee the product marketing and management organizations as well as corporate communications and corporate marketing. Brunnick formerly held the position of senior vice president of Research and Development at Vignette, where he drove the company's worldwide software research and development efforts. Brunnick joined Vignette in 1999.

Somesh Singh Joins Vignette to Lead R&D and Technical Operations

Somesh Singh will join Vignette as senior vice president of Research and Development and Technical Operations effective February 13, 2007.  Singh will oversee Vignette’s global engineering, customer care and IT organizations. Prior to joining Vignette, Singh held several positions at BMC Software including vice president and general manager of Worldwide Research and Development Operations and Cross Platform Technologies. Most recently, Singh served as vice president and general manager of BMC’s Identity Management Services Business Unit. Singh holds a Master of Business Administration from The Wharton School in Philadelphia, a Master of Science degree in Chemical Engineering from Columbia University in New York and a Bachelor of Science degree in Chemical Engineering from Banares Hindu University in India.

1Q 2007 Financial Outlook

While year over year earnings growth in the fourth quarter was strong, revenue growth was modest.  Vignette anticipates this revenue trend to continue in the first quarter of 2007 with flat to modest growth or a modest decline in total revenue. 

Vignette currently anticipates first quarter 2007 revenue to be between $45 million and $50 million. First quarter 2007 GAAP net income is currently expected to be between $0.03 and $0.10 per share on a fully diluted basis. On a non-GAAP basis, the company expects first quarter 2007 net income to be between $0.11 and $0.18 per share on a fully diluted basis. For a discussion of factors that could cause actual results to differ materially from these targets, see ‘Forward-Looking Statements' below.

Conference Call Details

Vignette will host a conference call and live webcast regarding its fourth quarter and fiscal year 2006 financial results on Thursday, January 25, 2007, at 8:00 a.m. EST. To access the webcast, visit the Investor Relations section of Vignette’s Web site.

If you are not able to access the live webcast, dial-in information is as follows:

Dial-in number: (888) 275-3515

Call title: Vignette Financial Results

The webcast and conference call will be archived and available for replay from Thursday, January 25, at 9:00 a.m. EST to Sunday, February 25, at 11:59 p.m. EST. The replay information is as follows:

Toll-free number:  (800) 642-1687

International number: (706) 645-9291

Access code: 1403245

Non-GAAP Financial Information

Vignette believes non-GAAP financial information provides a more accurate representation of the company's financial performance and uses non-GAAP information internally to evaluate and manage the company's operations. The presentation of this additional information is not a substitute for results prepared in accordance with accounting principles generally accepted in the United States.

About Vignette Corp.

For more than 10 years, Vignette has helped organizations worldwide transform their content from a liability to an asset. Vignette’s family of Enterprise Content Management solutions lets these organizations leverage their records, documents, Web pages, images, multimedia and other unstructured content to create new opportunities, expand profits, manage their risk and realize greater savings and efficiencies. Vignette is headquartered in  Austin, Texas with operations worldwide.  For more information, please visit www.vignette.com.

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FORWARD-LOOKING STATEMENTS

This release may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements included in this document are based upon information available to Vignette as of the date hereof, and Vignette assumes no obligation to update any such forward-looking statement. 

Vignette and the V Logo are trademarks or registered trademarks of Vignette Corp. in the United States and other countries.

All other names are the trademarks or registered trademarks of their respective companies.

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